Published: December 18 2023
Hungary has been ranked as the second poorest country in the European Union (EU) according to Eurostat's annual data on actual individual consumption (AIC). This position highlights the growing disparity within the region, with Austria emerging as the second richest nation.
Measuring actual individual consumption (AIC)
AIC is a metric that measures the purchasing power and consumption of households, taking into account factors such as what households buy and receive from the state and non-profit institutions. Hungary's AIC stands at only 71% of the EU average, indicating a significant discrepancy in purchasing power equality.
Inflation eroding economic gains
Despite government efforts to stimulate the economy, Hungary has experienced minimal growth in consumption due to inflation. The country's consumption figure has only marginally risen from 70% in previous years to 71% in 2022. In contrast, neighboring countries such as Slovakia, Croatia, and Bulgaria have shown more substantial growth during the same period.
Comparative regional growth
Hungary's slow progress becomes more apparent when compared to its regional counterparts. While Hungary's AIC increased by only 1 percentage point, Slovakia saw a more significant leap from 71% to 77%, Croatia from 68% to 76%, and Bulgaria from 61% to 69%. This discrepancy highlights Hungary's struggle to keep pace with its neighbors in terms of economic growth.
GDP per capita: A different perspective
While Hungary's AIC paints a bleak picture, its GDP per capita tells a slightly different story. The country has seen a modest improvement from 75% to 76% of the EU average in 2022. However, Hungary still lags behind countries like Luxembourg, Ireland, Denmark, the Netherlands, and Austria in terms of GDP performance. This discrepancy emphasizes the need for a comprehensive approach to address the economic challenges faced by Hungary.
Understanding disparities
The disparity between GDP and AIC figures highlights the complex nature of economic analysis. Hungary may fare better in terms of GDP due to manufacturing activities, but the living standards of its citizens, as reflected in AIC, are lagging behind. The Hungarian government must adopt a comprehensive strategy to address the multifaceted issues affecting the country's prosperity within the EU.
Questions & Answers
What is the latest release from Eurostat about Hungary's economic situation? According to Eurostat's annual data on actual individual consumption (AIC), Hungary is ranked as the second poorest country in the European Union (EU).
What is actual individual consumption (AIC)? Actual individual consumption (AIC) is a metric that measures how much households buy and receive from the state and non-profit institutions. It is adjusted for the price level in each country to provide a more nuanced understanding of purchasing power equality.
What is Hungary's AIC compared to the EU average? Hungary's AIC stands at a mere 71 percent of the EU average.
Has Hungary's AIC improved over the years? Hungary's AIC has only marginally risen from 70 percent in 2020 and 2021 to 71 percent in 2022.
How does Hungary's AIC compare to its neighboring countries? Hungary's slow-moving growth in AIC becomes more evident when compared to its regional counterparts. Slovakia, Croatia, and Bulgaria have shown more substantial growth during the same period.
Which countries are the wealthiest in the EU according to AIC? Luxembourg remains the wealthiest country in the EU, but Austria has made significant strides and now ranks second, tying with Germany at 118 percent of the EU average.
What is GDP per capita? GDP per capita is a measure of the economic output of a country per person. It provides insight into the average income and living standards of a country's population.
How does Hungary's GDP per capita compare to the EU average? Hungary's GDP per capita is around 76 percent of the EU average in 2022. It ranks sixth or seventh among EU countries.
What is the disparity between GDP and AIC figures in Hungary? The disparity between GDP and AIC figures in Hungary illustrates that while the country's GDP may appear relatively stronger, its citizens' living standards, as reflected in AIC, are lagging behind.
What challenges is the Hungarian government facing in terms of the country's economy? The Hungarian government is facing economic challenges in improving the country's living standards and addressing the multifaceted issues affecting its prosperity within the EU.
