Hungarians go shopping abroad because Hungary became too expensive

In the 1990s and the 2000s, it was not extraordinary to see Slovakians, Romanians or Serbians in Hungarian supermarkets close to the border. The reason was simple: Hungary was cheaper than the neighbouring countries. In the last few years, the trend reversed: Hungarians flood Romanian and Slovakian supermarkets because they can save lots of money if they go there to do their shopping. However, that means the Hungarian state loses an immense amount of taxes, which is bad for the struggling Hungarian state budget.

Shopping abroad is cheap

According to RTL Klub, a Hungarian commercial TV channel, Hungarians spent 40% more money abroad than they did in 2023. The Ministry of National Economy published the shocking increase, so we should take it seriously. The Hungarian government believes shopping abroad is one of the factors why consumption in Hungary – and the state revenues generated by the world’s highest VAT – is falling unstoppably.

The Orbán cabinet believes that is because of the many holidaymakers, but GKI writes about “shopping tourism” instead. Of course, some local subsidiaries of international chains try to attract Hungarians with Hungarian-language leaflets to their stores in Slovakia or Romania.

RTL Klub asked multiple Hungarian citizens living close to the Hungarian-Romanian border. One of them lives close to Nagyszalonta (Salonta), so they regularly buy food and clothes in the Romanian town with a Hungarian majority (53% in 2021). János Kiss said they could save up to HUF 15 thousand (EUR 38) with only one route.

Another local said they travel to Salonta once every ten days. He added everything was cheaper there than in Hungary, including tuna salad. Compared with Hungary, they pay half the price for liver paste in a local supermarket.

Hungary loses tax revenues

Based on the latest figures from the Eurostat, food prices are 27% lower in Romania than in Hungary. In Slovakia, that rate is 6% higher. However, that is only the average. An international chain has been advertising its products to potential customers in Hungary with Hungarian-language magazines for months. Interestingly, the Slovak state tried to oppress Hungarian language use in the Southern regions (where hundreds of thousands of Hungarians live thanks to the post-war peace pacts). Now, they publish Hungarian promotional leaflets to attract more customers from beyond the borders.

They list their prices not only in euros but also in Hungarian forint. A Hungarian customer said beer costs 50% of the Hungarian price in Slovakia. Therefore, it is worth doing the shopping abroad.

The Hungarian National Economy Ministry said Hungarians spent 40% more abroad in Q1 2024 than in Q1 2024. The ministry believes consumption in Hungary falls because of the growing savings, property purchases and holidaymaking abroad.

Hungary is more expensive due to its government?

GKI believes holidaymaking means one-day shopping trips to cheaper countries like Romania and Slovakia. CEO László Molnár said more and more Hungarians discovered that Hungarian stores became very expensive compared to their Romanian or Slovakian counterparts, so it happens that they look for their favourite chain’s store beyond the border.

Lajos Braunmüller, a senior analyst of Agrárszektor, said the world’s leading VAT in Hungary (27%) and the Hungarian government’s 4.5% excess profit tax paid by retail chains (or rather their customers) raises product prices by 23% in Hungary.

Consumption fell by 0.1% between May and June. That means consumption in Hungary is still below pre-COVID levels.

Read also:

• Multinationals in trouble: Hungarian government imposes a new special tax, keeps excess profit tax – read more HERE
• Hungarian government plans significant minimum wage increase – Could EUR 1,000 become the new standard?

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