What a shame: Hungary is one of the poorest nations in the EU – latest figures

In the latest release of Eurostat’s annual data on actual individual consumption (AIC), Hungary finds itself in an unenviable position as the second poorest country in the European Union (EU). Meanwhile, its neighbor Austria has surged ahead to become the second richest, signaling a growing disparity within the region.

Measuring actual individual consumption (AIC)

AIC is a crucial metric that measures how much households buy and receive from the state and non-profit institutions. Adjusted for the price level in each country, AIC provides a more nuanced understanding of purchasing power equality. Hungary’s AIC, however, paints a grim picture, standing at a mere 71 percent of the EU average, HVG reports.

Inflation eroding economic gains

Despite a substantial pre-election financial injection of billions by the Hungarian government, the increase in consumption was minimal, with inflation swiftly eroding any surplus. The stark reality is that Hungary’s consumption figure has only marginally risen from 70 percent in 2020 and 2021 to 71 percent in 2022. In contrast, other regional players like Slovakia, Croatia, and Bulgaria have shown more substantial growth during the same period.

Comparative regional growth

Hungary’s slow-moving growth becomes even more evident when compared to its regional counterparts. While Hungary inched up from 70 to 71 percent in AIC, Slovakia made a more significant leap from 71 to 77 percent, Croatia from 68 to 76 percent, and Bulgaria from 61 to 69 percent. This discrepancy underscores Hungary’s struggle to keep pace with its neighbours.

Shifting wealth dynamics

At the top of the EU wealth ladder, Luxembourg remains the wealthiest country, though its relative standing has slightly diminished. Notably, Austria has made significant strides, ascending to the second position, tying with Germany at 118 percent of the EU average. This shift is remarkable, given Austria’s fifth-place standing just a year ago.

GDP per capita: A different perspective

While Hungary faces challenges in AIC, its GDP per capita tells a slightly different story. Ranking sixth or seventh in the EU, Hungary has moved from 75 percent of the EU average to 76 percent in 2022. However, this improvement is modest, and the country still lags behind leaders like Luxembourg, Ireland, Denmark, the Netherlands, and Austria in GDP performance. Read about more detailed insights of recent GDP data in our article HERE.

Understanding disparities

The disparity between GDP and AIC figures illustrates the nuanced nature of economic analysis. Hungary’s GDP may appear relatively stronger due to manufacturing activities, yet its citizens’ living standards, as reflected in AIC, are lagging behind. As the Hungarian government grapples with economic challenges, a comprehensive approach is necessary to address the multifaceted issues affecting the country’s prosperity within the EU.

We’ve also covered that Eurostat is engaging with the Hungarian Central Statistical Office (KSH) to discuss the calculation method for energy inflation. Concerns are rising about the reliability of Hungarian statistics. Stay informed with the details in this article.

Source: HVG