Difficult days ahead for Hungarians as prices soar

Budapest [Hungary], July 23 (ANI/Xinhua): Fueled by supply chain disruptions and the Russia-Ukraine conflict, soaring prices are making life increasingly difficult for Hungarians; some chose to protest while others mull closing their businesses.
"The price of the bread increased by 200 forint: it was 350 a piece and now it's at 540," Mara Kiss, owner of a family bakery, situated in Urom, a suburb of Budapest, told Xinhua.
In response to the hike of prices, Mara's customers chose to buy only the necessities such as bread and buns, and pick less "luxury" products such as expensive sugar coated cakes or filled pastries.
"Products, especially sweets like sponge cakes and chocolate buns are really expensive now, so I buy less of these," Imre Ferenc, a young regular customer of the bakery, told Xinhua.
People have more and more difficulties in paying for their needs as literally everything becomes more expensive, he added, before settling on a bottle of cooled soft drink.
Mara said that the complaints of clients about the prices were constant and her income has diminished.
The bakery, founded decades ago by Mara's late father, has a big emotional value for her whole family. Even so, she now considers selling the small shop: "I don't even know if I will be able to meet ends with the expected increase in energy prices, it might simply not be worth it."
Prices in Hungary began soaring at the end of last year, caused mostly by disruption in the global supply chains, a result of COVID-19 related lockdowns, and were further pushed upwards since the explosion of energy prices due to the Russia-Ukraine conflict that erupted in February this year, according to local business portal Portfolio.
To lessen the burden of inflation, Hungary's government capped the prices of six basic food items in the middle of January, and also decided in May to impose a 2.2-billion-U.S. dollar "Extra Profit Taxes" for 2022 and 2023 to curb inflation .
But the measures had little effect as the annual inflation reached 11.7 percent and food prices increased by 22.1 percent in June year-on-year, according to the latest official figures.
Energy prices have soared so much that the Hungarian government cannot maintain its price caps on household energy prices anymore, and has introduced market prices from Aug.1. When consumption is above average, the electricity prices will double, from 36 forints up to 70.1 forints per kWh, and the natural gas prices will increase sevenfold, from 102 forints up to 747 forints per cubic meter.
The National Bank of Hungary (MNB) is expecting the annual inflation rate in 2022 to be 11-12.6 percent, 6.8-9.2 percent in 2023 and return under 5 percent only in 2024.
Protests in Hungary became commonplace last week, when angry demonstrators blocked access to two bridges of the capital. Mostly young couriers on bikes and mopeds were voicing their discontent almost every day at a modification of a tax law called "KATA" that is seen to multiply the tax rate for hundreds of thousands of small firms and private individuals.
The reaction to the government's measure is strong, because it will make their lives more difficult as the cost of life has become much more expensive in this Central European landlocked country.
"The modification to the preferential tax regime 'KATA' has a huge impact on my life and to those of my fellow couriers, as we are almost exclusively working under this system," Laci Katona, a young food courier, explained to Xinhua, on the sidelines of a demonstration.
From August 1, private entrepreneurs under "KATA" will not be able to invoice corporate entities who are their main clients. This means either they have to choose a much higher tax rate or quit their current job.
Facing soaring prices, Laci said he had no choice. He would continue to participate in the protests. After the stall of negotiations with the government, the demonstrations will restart next Monday morning. (ANI/Xinhua)