Why Are Grocery Prices So High in Hungary? A Political Economy Perspective

This paper explores the underlying factors contributing to persistently high grocery prices in Hungary, despite the country's reputation as a relatively low-cost economy. Through data analysis and expert interviews, it examines the structural, fiscal, and policy dynamics shaping food costs, from taxation and investment patterns to purchasing power and market size. The study situates Hungary’s grocery pricing within a broader European context, comparing local affordability with other capitals such as Vienna, Paris and Warsaw.

Beyond pricing, the paper considers the wider economic and social implications of food affordability. It evaluates the effects of policy responses such as price controls, tax relief, and EU-funded programs, and assesses their impact on consumer behavior, market competition, and investor confidence. The analysis also highlights challenges linked to regional disparities, income distribution, and administrative predictability in the sector.

While identifying long-standing structural issues, the study also notes encouraging developments. These include more targeted fiscal measures, enhanced access to EU agricultural funding, and innovation initiatives among younger producers. As Hungary approaches an important policy juncture, the paper aims to contribute to informed dialogue on the future of the country’s food economy and the balance between short-term affordability and long-term resilience.