Economy minister Nagy stole the day in the local media yesterday

HUNGARY - In Brief 02 Sep 2022 by Istvan Racz

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Mr. Nagy, lately the government cabinet member to announce bad news, formerly vice governor of the MNB, spoke on the role and the likely future of administrative price controls on the radio the day before yesterday. Essentially, he said that administrative price caps (on fuels and basic food items, and also on a part of mortgage loans if defined broadly) had done their job, and as inflation is climbing ever higher, their sustainability, from the fiscal and business point of view, needs to be thought over. He did not go any more deeply into specifics than this, but the domestic public, which is coming under increasing pressure because of the current run-away of energy prices, as subsidies were cut back just a short while ago, quickly went into wild second-guessing on what measures the government might be actually considering. This morning, the story continued by Mr. Nagy releasing an article in Magyar Nemzet, in which he said that (a) maintaining price subsidies to households on gas and electricity prices (in their markedly reduced form since August 1) is crucially important, and (b) SMEs need to be provided with help from the government in energy-intensive sectors. These statements must have aimed at removing some of the public fears that the government might be considering to give up its price subsidies completely, which (the fears we mean) seemed to have been reinforced by the same speaker just two days ago. Clearly, decision-makers need to speak very carefully in these days, as the public is impressed (or depressed?) by the fast-moving chain of repricing actions, driven by cost-push knock-ons and rising inflationary expectations. But beyond all these aspects, Mr. Na...