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Gov't Extends Food Price Caps Till June 30

Government

Photo by Astashov Yevhenii / Shutterstock.com

The government has decided to keep price caps on staples, such as milk, flour, eggs, and pork, in place until June 30, Gergely Gulyás, the head of the Prime Minister's Office, said at a regular press briefing on Thursday, according to a report by state news wire MTI.

The price caps, rolled out to ease inflation, were set to expire at the end of April.

Government spokesperson Alexandra Szentkirályi said the government will introduce a new measure "by July 1 at the latest" requiring retailers to select one product from 20 designated product groups, such as ones for poultry and bakery goods, to be offered at a discount of "at least 10%" compared to the lowest price in the previous 30 days. The government weighed similar measures in place in France and Greece when taking the decision on the new policy tool, she added.

She said the measure would apply only to retailers with revenue over a certain threshold.

Fielding questions, Gulyás said inflation will "probably fall at a faster pace in the summer" with a "breakthrough" seen possibly in July or August.

Gulyás said the government will cut the price microbusinesses eligible for regulated electricity prices pay over the average consumption threshold from HUF 165 to 70/kWh.

He also said the government will grant farmers irrigation relief saving them close to HUF 10 bln this year.

Commenting on an interview with National Bank of Hungary (MNB) deputy governor Barnabás Virág published a day earlier suggesting central bank policy makers could decide to cut the MNB's O/N collateralised loan rate, Gulyás said the government welcomes the deputy governor's communication, while acknowledging that the task of shaping monetary policy belongs to the central bank.

That's the first favourable sign that could point to a possible reduction in rates," he added.

Gulyás said modifications to the contract on the upgrade of Hungary's Paks nuclear power plant involve "technical changes" but do not affect the "main parameters" of the construction. The price and the interest on the credit for the project is unchanged, he added.

The changes must be submitted to the European Commission for approval, he said.

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