In a move to control inflation, Hungary s government stepped into the gas and drugs markets, setting prices for the second half of the year.
Companies affected say that the move is tantamount to state intervention the free market.
Drugs prices have been for all intents and purposes frozen from July until a long-term agreement is thrashed out. Following lengthy disputes, the cabinet reached an agreement with the national oil and gas group MOL allowing the company to raise retail gas prices in line with inflation. The government s June 1998 manifesto gave top priority to curbing inflation, which plagued the economy in the 1990s. In 1998, inflation fell to 14.2pc from over 18pc in 1997, as planned by the previous government, and following positive trends last year, it has sunk to a 12-year low of 10pc. The government has limited powers to intervene directly in determining market prices but reserves the right to take direct action in extraordinary circumstances.