Hungary overtakes yet another Western state on key European list

Even despite the crisis, Hungary is constantly approaching the development level of the EU, based on Eurostat's recently updated GDP figures, and is now the 20th most developed member state of the bloc. The government, however, harbours more ambitious goals, which – according to analysts – are not at all unfeasible.

ECONOMY MARCH 31. 2023 15:34

The upward momentum of the Hungarian economy seems unshaken even by the energy crisis. In fact, it improved its position in last year’s competition among EU countries, according to fresh data published by Eurostat, the EU’s statistical office. Hungary’s development in terms of GDP per capita, measured at purchasing power parity,has improved by 2.5 percentage points last year, thus reaching 77.5 per cent of the EU average, moving the country from 21st to 20th place in terms of 2021’s development ranking, writes the Hungarian Vilaggazdasag.

This puts Hungary directly in front of Portugal and Romania, so Hungary is still ahead of its Eastern neighbour. However, the fact that in the past few years it’s managed to overtake two southern European member states (Greece and Portugal) that joined the bloc in the 80s but is a bigger achievement. (In the meantime, Eurostat has carried out a data revision and lowered Hungary’s rating from 76 to 75 per cent, which means the country overtook Portugal last year, and not in 2021). Poland is one place ahead and is already besieging the 80 per cent threshold, which Hungary also has a chance to achieve, at least on the basis of the fact that – according to analysts who previously spoke to the daily Vilaggazdasag – the country’s catching up to others has been continuous over the past decade:

Compared to 2010, we came closer to the EU average by 11.5 percentage points, which was the second fastest development among the Visegrad countries, and next year there is a good chance that we will also approach the 80-percent level.

Even despite the economic difficulties, Hungary will definitely need to increase the pace with which it’s catching up, if the government is serious about its goal, as relayed by Economic Development Minister Marton Nagy at this year’s opening of the Hungarian Chamber of Commerce and Industry. Mr Nagy said the aim was for Hungary to reach 90 per cent of the EU average by 2030, which would realistically make Hungary the 15th most developed state in the EU.

Currently, this is where Slovenia and the Czech Republic are, so reaching this level – to which end it would have to improve by 1 percentage point against the EU average each and every year – would be no small feat for Hungary’s economy. However, analysts have confirmed that reaching the 85 to 90-percent bracket is achievable by the end of this decade, according to Vilaggazdasag. All this, however, is unthinkable without the development of Hungary’s regions and countryside, so it comes as little surprise that regional development is a focal point in the current government cycle. Although, according to a recent EU study, Hungary’s so-called NUTS 2 regions are still catching up, there is still a very large gap between the capital and the rural areas, which is important to overcome, as the country’s competitiveness would be significantly improved if this gap was to be reduced.



economy, europe, Hungary