Orban lowers staple food prices and fights inflation before the vote

Orban lowers staple food prices and fights inflation before the vote

Hungary’s government will reduce the cost of six basic food varieties from February, Prime Minister Viktor Orban said on Wednesday in the midst of an inflationary surge, extending price caps currently set up for energy, fuel and home loans in front of an April national election. Orban, who faces an intense battle for re-election on April 3, said the costs of flour, sugar, sunflower oil, milk, pork leg and chicken breast should be scaled back to mid-October levels from the following month.

For the first time since taking power in a 2010 landslide, Orban, 58, and his nationalist ruling Fidesz party will face a united front of opposition parties at the ballot.

“Prices are rising across Europe due to an increase in energy prices,” Orban said in a video after a government meeting. He said the price cuts must be applied nationwide.

The opposition alliance includes the Democratic Coalition, the Socialists, liberals and the formerly far-right, and now centre-right, Jobbik. The alliance is led by small-town mayor Peter Marki-Zay, an energetic political outsider.

However, Hungarian inflation soared to a 14-year-high of 7.4% in November, above expectations. Economists polled by Reuters see December inflation coming in at a still-hefty 7.2%.

Fidesz had a five-point lead over the united opposition in a December survey by pollster Median published late last month.

Marki-Zay said Orban’s announcement represented what he called an admission that the economy was in a “tragic state”.

“An atrocious government that starts tackling prices in the last 12 weeks of its 12-year-long rule with a two-thirds (parliamentary) majority must go,” he said in a Facebook post.

In November, Orban announced a three-month cap on fuel prices that could be extended after a review in February. Orban has also imposed a cap on retail mortgage interest rates until the end of June to shield borrowers from rising loan repayments after surging inflation forced the central bank to hike interest rates much higher than previously expected.

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