Is there really “record inflation” in Hungary? | Mandarin
We constantly hear from the media and opposition politicians that there is currently “record inflation” in Hungary. We checked to see if this is indeed the case!
First of all, it is worth clarifying what we are talking about when we examine whether the Hungarian economy is really characterized by record inflation, because the statements of the opposition commentators and politicians do not reveal whether they understand this statement in a European comparison or historical context. To avoid misunderstandings, I watched both!
The latest November inflation data came out a few days ago:
Figure 1 November inflation, in annual comparison, in European countries
According to them, inflation in November was really very high, 22.5 percent in an annual comparison, in Hungary, but it was also higher in three European countries, Lithuania, Ukraine and Moldova. year Lithuania is a member of the EU, so
it is absolutely not true that we have inflation in Europe or the European Union!
I’ll just note in parenthesis that Turkey is also part of this table with its 84 percent inflation, but since we can already hear how the opposition commentators join in, saying that Turkey is not Europe (although in many respects they are still classified: economic statistics, NATO, soccer He participates in the European Championships, he starts in the European qualification zone for the World Cup qualifiers, etc.), that’s why we were so generous that we don’t count him towards Europe. It is also important to mention that the other two Baltic states, Latvia and Estonia, are not far behind the Hungarian inflation data.
Let’s look at it from the other perspective, historically. We will be generous again – we right-wingers are just like that – and we will only know with the inflation data afterwards, even though it turns out that, for example, during the Second World War or in ’56, there was much higher inflation than now. But then let’s look at the data after the system change:
Figure 2. Changes in inflation in Hungary between 1990 and 2022 (year/year, %)
It should be noted here that the annual inflation figure for 2022 (14.5%) is estimated, as it is still ongoing in the month of December, and the results will only be available from January. that annual inflation data is obtained by taking the average of all monthly inflation data measured in annual comparisons.
It is clearly visible, 28.4 percent in 1990, 34.8 percent in 1991, 23.7 percent in 1992, 22.5 percent in 1993, 18.9 percent in 1994, 28.9 percent in 1995, In Hungary, inflation was 3 percent, 23.5 percent in 1996, and 18.3 percent in 1997. We have highlighted these eight (!) years in red, because in these years the annual inflation was much higher than what is expected this year (14.5 percent). so
Historically, it is not true that there was record inflation, since there have been eight years since the regime change when the annual inflation was higher than this year.
If we look at November’s 22.5 percent inflation, there were also six years (1990, 1991, 1992, 1993, 1995, 1996) when annually inflation was also better or higher, not on a monthly basis.
Since the change of regime in 1991, inflation has been 4.8 percent on an annual basis3. It is interesting to note that
at that time, Ákos Péter Bod was the Minister of Industry and Trade, who is currently so fiercely criticizing the economic policy of the Orbán government…
It is also important to mention that another big critic of the Orbán government and the current inflation is Lajos Bokros, whose finance ministry between 1995 and 1996 also had much higher inflation (28.3 percent in 1995 and 23.5 percent in 1996). ), mint mostly. Mr. Bokros last gave a “fantastic” performance in socks and sandals and a checkered short-sleeved fishing shirt in the ATV studio in August, where we learned from him that the Hungarian economy is currently in shambles and that the state will soon go bankrupt. Although the truth, on the other hand, is that all economic indicators are good except for inflation, he does not even mention that during his tenure as finance minister, not only inflation, but also all other macroeconomic indicators (GDP growth, unemployment rate, etc.) it was much better than now and then we were in a state of bankruptcy.
Finally, I have prepared a summary where I have collected the frequent statements related to inflation that have arisen recently and we will examine whether they are true:
NOT TRUE (Lithuania, Ukraine and Moldova also currently have the highest inflation among European countries, see above in more detail.)
Is it true that inflation within the European Union?
NOT TRUE (Based on the last November data, inflation was higher in EU member Lithuania, see details above.)
Is it true that historically there is currently “record inflation” in Hungary?
NOT TRUE (Only since the change of regime have there been eight years when annual inflation was higher than this year, see details above.)
Is it true that inflation in Hungary has been the same for the past 20 years?
TRUE (Unfortunately, this is true, considering the inflation of the last 20 years, this year’s inflation is the total.)
Is it true that within the 22.5 percent inflation in November, food inflation was even higher?
TRUE (Actually, in the annual compilation of food inflation, on average, more than 40 women have increased the last information sheet of the KSH in December and there is a food item, eggs, whose consumer price has increased by more than one hundred (102.9) in one year.)
In summary, we can say that
Inflation is really very high in Hungary at the moment, including the price of food and household energy, which is rising in an extraordinary way, but there is currently no “record inflation”
neither in a European nor historical context!
When the term “record inflation” is thrown around in the various programs of RTL Klub and ATV, in the articles of the opposition news portals, it is a simple lie and mood-mongering. It would be worthwhile for lawyers to consider whether the above-mentioned irresponsible, sensationalist lying does not exhaust the concept of scaremongering.
The point is that since the regime change there has been such, even much higher inflation, if we survived that, we will overcome this too!
The author is an economist
Opening image: Pixabay