In May 2025, Hungary’s Central Statistical Office (KSH) reported a 4.4% year-on-year increase in the consumer price index. This figure suggests that, despite ongoing government interventions, inflation is once again on an upward trajectory.
While the data remains within the bounds of previous forecasts — including projections from GKI Economic Research — which anticipated inflation around 4.5% for the year, it significantly exceeds earlier government expectations of just 3.2%.
Monthly Changes in Food, Household Energy, and Service Prices
(Index, December 2020 = 100)
Source: GKI calculations based on KSH data[1]
When analyzing price trends over a longer horizon, it becomes evident that the first major wave of food price increases had passed by January 2023. Between then and September 2024, food prices rose by 7.5 percentage points — a smaller increase than the overall consumer price index (CPI), which rose by 9.7 percentage points over the same period. In the subsequent eight months, however, food prices surged by another 7.6 percentage points. As a result, over the span of nearly four and a half years, food has become almost 77% more expensive compared to December 2020. Service prices, meanwhile, have seen nearly continuous increases since early 2021, culminating in a total rise of 44.6% over the same period. Household energy prices present a more complex picture. Due to the KSH’s specific calculation methodology, prices appeared unchanged following the sharp increase in September 2022, and even showed a slight decline until October 2024. However, since then — largely driven by higher consumption — energy prices have risen again, with an 11.7 percentage point increase over nine months. Despite partial continuation of utility subsidies, household energy now costs 43.6% more than it did in December 2020. The categories of other goods, fuels, as well as alcoholic beverages and tobacco products, also saw similarly steep price increases during the period under review, rising by 46.4% and 50.3%, respectively. In contrast, price growth for clothing and durable goods remained below average, ranging between 22.6% and 23.5%.
The causes behind rising prices are multifaceted. Key contributing factors include the increase in agricultural producer prices, the surge in energy costs—Hungarian producers, for example, pay roughly 20–30% more for electricity than their counterparts in other EU countries—and the rise in regulated fees. Packaging costs have also gone up, partly driven by higher product fees under extended producer responsibility (ERP) regulations. Wage costs have increased significantly as well, and the special retail tax imposed on international chains, which dominate food retail in Hungary, has added further pressure. In addition, warehousing has become more expensive, and the weaker forint against the euro has made imported goods costlier. These rising costs are increasingly passed on to consumers, as businesses have less and less room to absorb them.
It is also worth comparing the inflation trends between last year and this year. Between January and May, prices rose by 2.8% in 2024 and by 2.6% in 2025 compared to the previous December, indicating a slight deceleration. For food, the increase was 1.9% last year and 2.4% this year. In the case of services, the figures were 5.3% and 4.4%, respectively, while household energy, which rose by just 0.5% last year, saw a 6.4% increase this year. Alcohol and tobacco products also experienced above-average growth, with a 2.6% rise by May 2024 and 5.5% over the same period in 2025. At the same time, the KSH reported price declines in clothing, durable consumer goods, and fuel.
Consumer Price Index by Main Categories, January–May 2024 and January–May 2025
(Base: December of the previous year = 100)
Source: GKI calculations based on KSH data[2]
Based on the above, it can be concluded that the acceleration in price increases is largely driven by two key components of the consumer basket: alcoholic beverages and tobacco products, which account for 12% of the index, and household energy. Services also contributed, though to a lesser extent.
Another important observation is that food price inflation has not come to a halt — despite a temporary dip in April. As previously noted, this is primarily because food retailers tend to pass on supplier price increases only partially and with a delay. These supplier increases are themselves driven by rising costs, most notably the higher energy prices resulting from cross-subsidization policies meant to preserve utility price caps, as well as persistently rising labor costs that outpace productivity growth.
[1] https://www.ksh.hu/stadat_files/ara/hu/ara0040.html
[2] https://www.ksh.hu/stadat_files/ara/hu/ara0040.html
