Administrative price regulation will most likely be extended and broadened after end-May

HUNGARY - In Brief 03 May 2025 by Istvan Racz

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Economy Minister Nagy has made a considerable number of public appearances on the existing administrative price regulation applied to the retail prices of certain food items recently. The summary of his statements must be as follows, we think: - The limitation of the retail price margins used at the sales of 30 food items, representing one-fifth of all retail sales of food and about 6% of the total CPI basket, by food retailers with annual turnover above HUF1bn, originally planned to be in force until end-May, will be extended for a currently unknown period, but most likely at least until the end of this summer; and -  The scope of this regulation will be most probably broadened to include washing and dishwashing powders and liquids, shower gels, diapers and baby care products, adding a further 1-2% of the total CPI basket, and also the list of retailers required to adhere will be most likely extended to include the drug-store-type shops that typically sell household chemicals, cosmetics, and the like. In these sentences, we call these changes "most probable" because of Mr. Nagy's now usual vague style of communication: he refers to these measures as essentially certain, yet he occasionally mixes affirmative with conditional, not making absolutely clear-cut what is a decision and what is something that is still being considered. So we treat the above items as near-facts, until the specific decrees get published. Our immediate comments are the following: - The extension of the regulation in question cannot be explained by the lack of its success so far. Since its introduction on March 17, this regime has brought retail prices down by 18.6% (1.1% of the total CPI) on ave...