Hungary Newsflash, Week 19, 2022

Inflation reaches 21-year record

According to the latest data by the Central Statistical Office (KSH), inflation in Hungary reached 9.5% in April while core inflation was at 10.3%. This is the highest inflation figure since 2001, which also means that after twenty-one years, the Hungarian economy hit a double-digit inflation figure again.

At least according to the official KSH figures, the price increase of groceries has accelerated by 2.6 percentile points from 13% to 15.6%, which means that in absolute figures, food prices rose by 3.4% in a single month.

The factors behind the new inflation figure probably include the increased business risks incurred by Russia's invasion of Ukraine and the global food crisis that it caused, which led to shortages in food commodities and steel, but the process also probably entered a vicious cycle in which the uncertainty caused in the business world by the inflation itself leads to a feedback loop.

Consumer prices skyrocket

The news portal Telex.hu has recently compared Hungarian consumer prices between December 13, 2021, and May 4, 2022 to measure the effects of inflation on groceries. The December figures were previously used for an article that compared consumer prices in Lidl grocery stores in Italy and Hungary, respectively, highlighting that while food was 30% more expensive in Italy, with much higher salaries, Italians still spent less of their disposable income on food than Hungarians.

The recent publication compared the latest prices from the same Lidl grocery stores to the Hungary figures from December – And the results show that out of thirty-nine products, thirty-two became more expensive. Out of the remaining seven that did not change in price, four have prices that are capped per the Government’s January regulation, which will stay in effect until July.

Most of the food stuffs that the news portal tracked became 10-30% more expensive.

What makes the report more interesting though, is that according to the news portal, it contradicts the official inflation figures published by the Central Statistical Office (KSH). KSH officially measured aggregate y-o-y food inflation in March at 13%, out of which the price of bread rose by 27.9%, that of cheese by 21.8%, and the prices of seasonal fruits and vegetables increased 17.9%

Telex.hu however, states that either KSH underestimated food inflation, or else the war in Ukraine exacerbated the situation in a major way, because in five months, by the beginning of May, food prices had went through much higher inflation. A few examples of the Telex.hu figures include onions (52% price increase), toilet paper (47%), salmon (34%), chocolate ice cream (11%), Coca-Cola (7%), eggs (17%), extra virgin olive oil (6%), Edam cheese, sliced (27%), spaghetti pasta (40%), bread, whole grain (33%). For the whole list (in Hungarian), the .csv data file can be accessed in the original article.

The food categories that went through the most dramatic price increase include fruits and vegetables (50-52%), meat (34-45%, excl. capped-price chicken breast), finished products (40-47%), bread (33%).

Based on their own sampling, Telex.hu found that their own experimental consumer basket showed a total of 19.6% inflation within five months (which is a much shorter time window than the annual timescale that the KSH y-o-y figures are rooted in).

The news portal mentions as one of the possible reasons for the shocking consumer price inflation the governmental price capping measure as retail traders might have relied on increasing prices in other categories to make up lost profits (or actual financial losses) incurred by the caps put on basic food products in January.

Sunflowers: The Hungarian discovery that can enhance the efficiency of solar power

Researchers at the Eötvös Loránd University (ELTE) have reached a breakthrough in the research of the sun-following shifting orientation of sunflowers and their discovery might just boost the power generating potential of human-made solar panels, the scientists report in their article published in Nature.

Sunflowers are famous for their heliotropism, "turning with the sun," a phenomenon characteristic of the non-flowering immature heads of the plant. However, mature flowers stop turning with the celestial trajectory of the Sun and remain locked in a fixed azimuth that usually faces in a more easterly direction. The researchers took drone footage of fourteen sunflower plantation plots and except for two of them (in which the plants grew on southerly hillsides, making the relative angle of the Sun to the ground higher), mature plants followed this pattern.

The reason for this counterintuitive behavior has proven elusive for scientists since the days of Charles Darwin and the researchers at ELTE, working with the hypothesis that the easterly positioning of sunflowers somehow maximizes the plant's ability to gather sunlight, decided to reproduce the observed south-easterly alignment using solar panels.

The test was conducted at three sites in Europe (Central Hungary, Central Italy and South Sweden) and the results proved an easterly alignment to yield higher power outputs in solar panels in Hungary and Italy, but not in Sweden.

Using meteorological data, the team at ELTE found out that the distribution of cloud cover throughout the day makes afternoon on average more cloudy, making the morning hours the statistically most luminescent period of the day. This was not true for Sweden where cloud cover was more evenly distributed throughout the day.

According to the study, in Hungary and in places with similar meteorological characteristics, an easterly alignment of both sunflowers, and human-made solar panels, is more advantageous and in the case of Hungary, it can lead to a 5% increase in the yield of solar power.