Editorial: While we may Fall Back, can we Spring Forward?


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Perhaps it’s the natural melancholy of the fall mists finally creeping in, even as the year acts as if unwilling to let fully go of summer before embracing winter.

Perhaps it’s the uncertainty of what lies ahead, the fear of another winter of rising energy costs, or the possibility of the conflict in Gaza spilling over into the broader Middle East. Perhaps it’s that, in a world that has repeatedly proven it can move at breakneck speed, we seem to have been living with high inflation forever. Whatever it is, the economy seems uncertain of where it is heading.

If you look closely enough, there are positive signs to be read in the tea leaves at the bottom of the cup (other forms of rune-reading are available). Inflation is undeniably on the way down, and we are even, finally, into positive real wage territory. It is frustrating that the government seems unwilling to take part in any debate that asks why inflation was so high here, other than blaming the war, the Brussels sanctions packages against Russia and multinational retail chains. Those same criteria affected every other EU member, but Hungary’s inflation was noticeably head and shoulders above even its regional peers for long periods. As divorced couples will all too sadly confess, it is hard to have a conversation about anything if only one party is willing to engage, but how else do you learn for the future?

Talking about multinational retailers, the government has been touting the success of its price comparison platform this week, reckoning that it has removed 0.5 of a percentage point from headline inflation. That doesn’t seem like a huge amount, if I am brutally honest. But anything that helps the least well-off reduce the cost of their weekly shopping basket should be welcomed, and as a business publication, we commend anything that stimulates competition.

Other signals seem equally mixed. European economic strength is hard to spot, and as the EU is still where Hungary does the bulk of its business (despite the famed “Opening to the East”), this, as a history book from my youth used to put it, “is not a good thing.” Hungary’s government augurs growth of 4.6% in 2024. That, we can all agree, is “a good thing.” Inflation of 6% by the end of 2024 is better than the 11% MBH Bank predicts for this year but is still some way from the MNB target corridor of 2-4%. You might be excused for wondering if we will ever see those low inflation days again. But perhaps that’s just the melancholy talking again.

Robin Marshall


This editorial was first published in the Budapest Business Journal print issue of November 3, 2023.

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