The inflation rate in Hungary rose to 8.5% in March, reaching the highest level since the summer of 2007.Continue reading
Hungary’s government has decided to raise pensions by a further 3.9 percent from July in light of higher than expected inflation, bringing the overall pension hike to 8.9 percent, the prime minister’s chief of staff said on Thursday.
The 5 percent pension increase approved at the beginning of the year had been based on market expectations and the forecasts of foreign and domestic analysts, Gergely Gulyás told a regular government press briefing. However, based on current projections and data from the finance ministry and the central bank, the government now believes that an annual inflation rate of 8.9 percent is more realistic, he added.
The government is required by law to compensate pensioners in November if inflation exceeds the rate of pension increases, Gulyás noted. But because of the significant difference between current inflation forecasts and the original pension hike, a quicker pension increase is warranted, he added.
Therefore, pensions will rise by a further 3.9 percent from the beginning of July, he said, adding that the inflation-linked increase would be paid retroactively from the start of the year.
Featured photo by Zoltán Máthé/MTI