How much of Hungary’s wealth does the richest 10% control?

Even back in 2014, the concentration of wealth amongst the top 10% richest Hungarians was unprecedented. Based on the latest estimates as reported by hvg.hu, this group controls 56% of the Hungarian population’s assets. The poorer half of the country’s population only accounts for 8.9% of the total wealth.

According to the latest figures, Lőrinc Mészáros’s Opus group generated a profit of €168 million in addition to the taxed €77 million. 56.4% of the population’s total net wealth was in the hands of the richest 1/10 households. The richest 1% owned a quarter of total assets while the poorer half of the country’s population only had 8.9% of the wealth.

A sizeable wealth inequality

This data is surprising as it has always been the belief that Hungary has a relatively small wealth disparity when compared to the rest of the world. According to the study conducted by MNB (Hungarian National Bank), the top 1/10 ‘only’ owned 48% of total assets in 2014. While this 48% does represent wealth disparity, the recent figure of 56.4% obtained by KSH makes Hungary one of the least equal countries in the EU.

Even the 2014 figure was underestimated; a re-evaluation of the data led to the adjustment of the value from 48% to 53%. KSH (Hungarian Central Statistical Office) conducted the survey by asking participants in person. However, targeted households were unwilling to open up about their income and often understated the value of their assets. The data was therefore corrected by central bank officials using macroeconomic data from bank accounts based in the country.

The poorest half’s share of wealth increased slightly from 8.7% in 2014 to 8.9% in 2017. However, even though the richer half’s share of wealth decreased, within that group the richest 10% and 1% increased their asset values by 3.4% and 1% respectively.

Income-based inequality did not increase

Even though some people may be rich due to their assets – for example due to inheritance and valuable property -, they may still have a low income. This may be because they have low wages or a large family, the latter reducing the average wealth of each individual in the household.

Nonetheless, the data states that households with more wealth tend to have a higher income, while asset-poor households usually have lower wages – it is easier to increase wealth from the availability of assets. Based on this, MNB found in 2018 that 97% of government household securities and 98% of shares and equities were in the hands of the population’s richest 20%. In contrast, 31% of outstanding loans belonged to the poorest 20%.