No fruit, ham a luxury: Hungary food prices spike most in EU

>> Magdolna Gozon nibbles spicy green peppers from a fruit and vegetable stall at a sprawling indoor market in Budapest, sampling them to make sure they’re hot enough for a soup she’s cooking.

The 83-year-old retiree can’t afford to buy more if they don’t have enough kick — not with her small pension and Hungary facing the biggest spike in food prices in the European Union.

“I don’t buy fruits. We got potatoes from the municipality, so we don’t have to buy that, but onions became expensive,” said Gozon, who has stopped buying dairy and rarely shops for meat.

Food prices have risen dramatically across Europe in recent months, jumping 19.6% in March from a year earlier and becoming the main driver of inflation as energy costs have fallen. But in Hungary, food prices have surged more than 45% over the year, according to EU statistics office Eurostat, far surpassing the next highest figure of just over 29% in Slovakia.

Such price hikes are hitting consumers hard in the Central European country, forcing them to change what kind of food they buy and how much of it they can afford, and leading businesses to rethink what they offer for sale.

“Habits have definitely changed, so people are really thinking about what they buy. We’re almost to the point where sausage and ham are considered luxury food items,” said Szilvia Bukta, a manager at a butchery stall in Budapest’s historic Grand Market Hall.

“We also have to buy less because the prices are more expensive, and we know that there are not as many customers, so we definitely make purchases more carefully,” Bukta added.

Some types of food in Hungary have nearly doubled in price in the past year. Staples like eggs, milk, butter and bread cost 72% to 80% more, pinching pocketbooks in a country where the median net wage is just over $900 per month.

While most European economies are facing similar difficulties as Russia’s war in Ukraine fuels a costof-living crisis, inefficiencies in Hungary’s farming and food processing industries and a historic devaluation of the forint currency made the country’s “extreme inflation” worse than anywhere else in the EU, said Peter Virovacz, chief economist at ING Hungary.

“There have been droughts everywhere, energy prices have increased everywhere, supplier costs have increased everywhere,” he said. “But if production is not efficient enough, then of course the domestic producers will find that it is much more burdensome to pay for these costs.”

To make ends meet, not just farmers but restaurants, bakeries and other businesses have raised prices for customers and changed what they offer to avoid the most expensive ingredients.