Depressing data surfaces about Hungarian wages and GDP

In a recent update of the 2023 consumption data from Eurostat, Hungary has been surpassed by Bulgaria in the per capita consumption ranking. This marks a notable shift in regional economic performance and consumer behaviour, but it is saddening for Hungary. If this was not enough, shocking data also surfaced about Hungarian wages.

Surpassed by Bulgaria

As Portfolio reports, in 2023, Hungarian household consumption was 70% of the EU average, placing Hungary at the bottom of the ranking. Initially, Hungary had a slim 0.1 percentage point lead compared to Bulgaria. However, Eurostat, the statistical office of the European Union, recently revised Bulgaria‘s figure upward to 73%. The substantial revision suggests Bulgaria will likely maintain its advantage in future updates. In addition, Bulgaria’s overtaking of Hungary is not surprising, as the two countries were already close in 2022. Last year, Bulgarian household consumption grew rapidly, while Hungarian consumption declined.

The region’s performance

In the two decades of EU membership, the region has notably caught up, with household consumption drawing significantly closer to the EU average. However, there are some exceptions. Sadly, Hungary has made the least progress, alongside the two most developed countries in the region, Czechia and Slovenia. In addition to consumption data, Eurostat also published GDP per capita revision data, which reveals that Hungary stands at 76% of the EU average. This highlights the same tendency as in consumption numerals; Eastern countries are catching up, while Hungary is lagging.

The low domestic indicator has been extensively evaluated in the past year or two, trying to find factors behind these saddening numbers. Reasons include below-average catching-up rates in the region, low household indebtedness and high savings at the macroeconomic level, and a significant proportion of income allocated to investment rather than consumption.

In addition, the indicator should not be scrutinised too closely due to various measurement challenges. GDP and its components are complex to accurately quantify comparably, and determining relative price levels is also uncertain. Therefore, attention should be directed towards longer-term trends rather than precise numerical values.

Hungarian wages

Portfolio has also revealed shocking data about Hungarian wages. In 2023, findings from the Hungarian Central Statistical Office show a mixed picture of earnings among full-time employees. While average monthly gross earnings increased by 14.2% in nominal terms compared to the previous year, the distribution of these gains varied significantly.

A striking disparity emerged: while 89.1% of full-time workers saw their earnings rise, nearly 60% experienced modest increases in Hungarian wages between 5% and 24.9%. Notably, one in five workers enjoyed substantial raises of 25% or more, with an impressive one in twenty seeing their pay soar by 50% or more. However, despite these individual successes, the data also underscore a challenging reality for many, as 60% of workers faced a decline in real wages amid broader economic fluctuations.

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