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Hungary’s Orban says he hopes inflation will dip below 6% by year-end

BUDAPEST (Reuters) – Hungary’s government hopes inflation will ease back to below 6% by the end of 2022 after hitting a near 15-year high of 7.9% at the start of the year, Prime Minister Viktor Orban said on Saturday.

Orban, who faces a closely fought election on April 3, added that his government would phase out price caps on fuel, some basic foods and mortgages once inflation starts slowing. Retail energy prices caps will remain in place, he said.

“The policy of the four price caps did not feel good, we are not out of our right minds,” Orban told a business forum. “But desperate times call for desperate measures.”

The nationalist leader also said his government could announce a new foreign investment worth 6 billion euros ($6.79 billion) before the election, but he gave no further details.

Late on Friday, Orban’s government widened the scope of an interest rate freeze to home lease contracts.

Orban said tension between Ukraine and Russia and questions about the Nord Stream 2 pipeline that would ship natural gas to the European Union from Russia meant the outlook for energy price developments was uncertain in the coming months.

But he said the high external inflation environment would likely prevail in the foreseeable future.

($1 = 0.8833 euros)

© Reuters. Hungarian Prime Minister Viktor Orban speaks during a business conference in Budapest, Hungary, February 19, 2022. REUTERS/Bernadett Szabo

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