Sad news: food prices in Hungary exceed EU average
Hungarian prices are the highest in 9 of the 12 major commodity groups, with food, communications and housing being the most expensive, according to Eurostat.
In Hungary, food prices are particularly high, now above the EU average, according to Eurostat data, reports Portfolio. Hungarian price levels are much higher than those in Poland and Romania, which is why development and welfare indicators in purchasing power parity (PPP) are converging despite nominal differences.
Hungarian household consumption stood at 70% of the EU average in 2023, placing it at the bottom of the ranking. This is partly due to the fact that some of the value produced in Hungary does not become national income (this is the GDP-GNI gap), and the share of household income in national income has been steadily declining over the last 25 years, while the share of corporate and state income has been increasing.
Moreover, a very high share of GDP generated has been directed towards investment rather than consumption, slowing the convergence of average earnings across regions. Additionally, the population’s propensity to save has risen in recent years at the economy-wide level, meaning that a smaller proportion of income earned is being consumed compared to before.
According to the EU statistical office’s database, the price level of final consumption (AIC) for Hungarian households is 69.4% of the EU price level. Meanwhile, in the similarly developed Polish and Romanian economies, the figures are 63.5% and 54.1% respectively.
Food prices reach EU average for the first time
Source: Pixabay
Although the exact reasons for the price spike in Hungary are unclear, in the case of food prices, a high VAT burden, inefficiencies in the food industry, and poor price competition may be contributing factors. The high cost of communication may also play a role. Housing is more complicated, as household energy and rent are involved. In terms of household energy, Hungary seems relatively cheap due to the policy of reducing energy costs. For rent, there are no specific statistics, but it can be assumed that the price level is high. Recent data also show that food is the product area where Hungarian prices have caught up with the EU average for the first time.
It should be noted that convergence in economic development often goes hand in hand with convergence in price levels. This is evident in Hungary, particularly with products traded abroad, according to Portfolio.
Illustration: Pixabay
Despite the high food prices and the rapid price catch-up in recent years, the Hungarian price level cannot be considered particularly high overall, according to the portal’s analysis. The data indicate a significant variation in price levels within our development bracket. Relative price levels in countries with a similar level of development vary between 60% and 90%. The Hungarian indicator is not abnormal, but rather the Polish and Romanian price levels seem excessively low. Even the level of food prices is not extraordinary, as the price levels in Croatia, the Czech Republic, and the Baltic countries are similar.
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8 Comments
Steiner where are you ?.You need to comment about the latest triumph of the Fidesz government moving Hungarians forward.
No worries, tobacco and alcohol are still much cheaper in Hungary than EU average – you know, the affordable luxury.
People in Hungary are so quiet about that. Basic food with high prices compared with other countries. Just go to Romania, Vienna (should be more expensive), but they are the same or lower than the prices in Hungary.
and no one it protesting about that. People deserve the government they have it.
The Gullibility, the Naivety of Hungarians, just remain QUITE – but knowing the MESS just happening before there very eyes, taking NO responsibility in millions who voted the Orban – Fidesz Government (2) twice over 15 years back into office being LEMMINGS.
It’s a “Vesuvius” in waiting in Hungary.
Should re-enact what they did in 1956 – but orderly, in solidarity in there millions if they want to SOFTEN the effect of what sooner than later is going to happen.
Tough times now for growing millions of Hungarians but worse to come and INFLATION will explode again in there already near complete collapsed economy.
Unless you buy meat … Even supermarkets in Switzerland are cheaper.
This is a genuine concern – since the minimum wage here is slightly different – https://www.jobs.aldi.ch/aldi-suisse-als-arbeitgeber/benefits (great benefits and, yes, minimum wage at Aldi is CHF 4’700 for 42 hours…).
However, we live in the Land of Milk and Honey – and that, money cannot buy!
I have family members who with a long list go shopping in Austria with their station wagon. They are buying groceries and other goods for four families and their car is full on the journey back. Is is what Fidesz has done to Hungary.
@ostanus: Actually alcohol and tobacco aren’t all that cheap in Hungary at all. Palinka and wine is below the European average (as long as you don’t want premium Hungarian quality in which case it’s much more expensive than the equivalent in France, say, hence the recent influx of imported wines in local suparmarkets), beer is the same as in Germany and Austria while imported spirits like gin and whisky can be very expensive but even ‘no name’ stuff is expensive. You can buy gin or whisky for less in a UK supermarket, despite the much higher levels of excise duty on alcohol in the UK. Cigarettes are the same price as Austria or Spain, vaping products which are much better for the health are outlawed entirely while cigar prices are some of the highest in Europe, approaching the prices you’ll pay in the UK (by far and away Europe’s most expensive country for tobacco).
The Real Person!
The Real Person!
The peace party!