Energy market prices have skyrocketed in the past one and a half years.

The shocking scale of energy price increases is impacting inflation internationally and affecting the economic performance and growth of European countries, the Hungarian economic portal Vilaggazdasag writes.

The processes of past years and current data suggests that the European continent cannot tackle these fluctuations and crises.

While the United States and the countries of the Far East have typically quickly overcome the waves of crises, the European Union is suffering higher losses, with its share in the world economy also constantly diminishing.

This is the result of a series of consecutive crises. The process began with the 2008 financial crisis, followed by the migration crisis and then the coronavirus crisis, whose effects sent the international economy to its knees.

The pandemic upset the usual order of the global economy and damaged supply chains. The EU’s economy shrunk by 5.9 per cent in 2020.

The fragile economic situation manifested in skyrocketing energy prices. The EU had just managed to overcome the crisis caused by the pandemic by spring last year, and was immediately faced with an unfolding energy crisis, that was exacerbated by the war which broke out in February. The inflation caused by the conflict is clearly visible in the rising world market prices of electricity and gas.

Looking at the stock market, the one-year forward price of electricity, which was 60.4 euros per megawatt hour in May 2021 increased by 515.4 per cent to 371.9 euros per megawatt hour by 6 July 2022.

The available data also clearly shows that the Russian-Ukrainian conflict only exacerbated the situation,

boosting electricity prices by 128.3 per cent compared to February 2022.

The Dutch stock market price of gas has also sharply increased. The one-year forward price, which was 21.6 euros per megawatt hour in May 2021, rose by 650.3 per cent to the current level of 162.3 euros per megawatt hour.

The price of gas was also affected by the war, having climbed by an additional 157.3 per cent since the outbreak of the Russia-Ukraine conflict.

Overall, the price of electricity rose by 515 per cent in just over a year, while that of gas went up by 650 per cent during the same period.

The government is protecting Hungarian families from this incredible price hike by maintaining the utility cost reduction scheme.

Sectors which have achieved significant extra profits during the crisis are also contributing to the continuation of the scheme by paying the windfall tax in the spirit of equitable burden-sharing.

The skyrocketing world market prices of electricity and gas also suggest that the current rate of inflation is mostly (about 80 per cent) the result of processes outside Hungary.

It is also clear that the explosion in energy prices fuelled by the war not only drastically increases inflation, but causes enormous uncertainty, which also has a significant negative effect on the exchange rate of the Hungarian forint.