Hungary hopes inflation will dip below 6%

Hungary’s government hopes inflation will ease back below 6% by the end of 2022 paving the way for a phasing out of price caps on basic foods, fuel and mortgages, Prime Minister Viktor Orban said on Saturday.

Inflation, which hit a near 15-year high of 7.9% at the start of the year, plus a row with the European Union over democratic standards that has frozen pandemic recovery funding has complicated Orban’s path to re-election after 12 years in power.

“The policy of the four price caps did not feel good,” Orban told a business forum. “But desperate times call for desperate measures.”

Orban, who faces a closely fought election on April 3, said retail energy prices caps will remain in place. His ruling Fidesz party gained a two-point lead in February over the united opposition based on an opinion poll by Zavecz Research published earlier this week.

The European Union’s top court on Wednesday cleared the way to cut billions of euros of funds to Poland and Hungary, whose populist rulers the bloc accuses of violating democratic rights.

The EU says that to receive those funding benefits, countries must uphold common European standards, which Warsaw and Budapest have flouted by imposing political control over the judiciary and media, and restricting civil rights. While criticising the EU for not releasing the funds, Orban said he expected Hungary to receive part or all of the pandemic recovery funding by the end of this year, but did not elaborate on how the standoff with Brussels could be resolved.

Published in The Express Tribune, February 20^th, 2022.

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