Hungary Announces Food Price Controls Amid Inflation Crisis

Inflation data released by Budapest’s statistical office showed an annual inflation rate of 5.6 percent for February.

Hungarian Prime Minister Viktor Orban at a meeting in Brussels on Jun. 23, 2022. Ludovic Marin/AFP via Getty Images

Hungary’s government announced on Tuesday that it would cap profit margins on some basic food items in response to the growing inflation crisis.

Prime Minister Viktor Orban said in a Facebook video that commercial grocers must limit their markup on 30 different food items to no more than 10 percent of the wholesale price.

He said the policy would come into effect from mid-March and last until the end of May. He left open the option of it being extended.

Orban said that the government would monitor grocers’ compliance. He didn’t specify which foods would be included in the controls.

“In order to curb excessive and unjustified price increases, we have been negotiating with representatives of commercial chains in recent days,” he said. “Unfortunately, the vendors’ offers fell far short of our expectations.”

He said that for some items, such as eggs, margins had been 40 percent, while for products like butter and sour cream, they had exceeded 80 percent.

Inflation data released on Tuesday by Budapest’s statistical office showed an annual inflation rate of 5.6 percent for February, while food prices rose 7.1 percent year-on-year.

The average inflation rate across the 20-member Eurozone was 2.4 percent in February, according to the European Union’s (EU) statistical office, Eurostat.

Hungary, one of seven EU countries not in the Eurozone, uses the forint as its currency.

The “unpleasant inflation surprise” for Hungary “indicates intensifying price pressures in the Hungarian economy, particularly regarding long-term inflationary trends,” Orsolya Nyeste, a macroeconomic analyst with Erste Bank, wrote in a note on Tuesday.

Hungary has frequently experienced the highest inflation in the EU in recent years, with the cost of living being a key issue in the run-up to next year’s general election.

“In the current situation, conventional monetary stimulus could only exacerbate the inflationary shock through a depreciation of the forint,” ING economist Peter Virovacz wrote in a March 11 note. “The inflation situation is deteriorating on all fronts, significantly narrowing the room for manoeuvre when it comes to monetary policy.”

ING reported that the cumulative increase in food prices between February 2020 and February 2025 was 80.3 percent.

Orban’s government has cited the war in neighboring Ukraine and EU sanctions against Russia to explain the inflationary spiral, despite prices in other countries bordering the conflict-stricken countries such as Poland, Romania, and Slovakia not rising as steeply.

Extreme increases in food prices—peaking at more than 45 percent in early 2023—prompted intervention from past governments in Budapest, including price caps on some food items and fuel at filling stations.

Orban, the EU’s longest-serving leader, has been in power since 2010. He faces a challenge from the Tisza party in the 2026 election. It has placed the stagnating economy and cost of living at the center of its political platform.

Compounding Hungary’s difficulties, the EU has withheld billions in funding from Budapest due to concerns over judicial independence and rule-of-law standards.

A frequent dissenter among the 27-nation bloc, Orban was the only EU leader to not sign a statement voicing support for Ukraine last week, following a meeting of national leaders in Brussels.

He said the EU’s plan for supporting Ukraine, while also boosting the continent’s defense spending, would “ruin Europe.”

Orban also promised that his government would launch a domestic “public consultation” on Ukraine’s EU accession in the coming weeks, again in defiance of the general mood of the bloc.

The Associated Press and Reuters contributed to this report.