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Living standards improve in Hungary

Largely unchanged consumer prices and growing real income led to an increase in Hungarian living standards and a drop in the number of deprived people, financial analysts say.

editor: REMIX NEWS
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Due to rising real wages and stable prices an increasing proportion of Hungarians can spend more on daily items and can afford to make longer-term plans, according to Magyar Idők.

Average incomes are rising and the number of the deprived has fallen. By 2016, the number of those deprived dropped to 1.3 million compared with 2.7 million in 2012. The country has a population of 9.8 million. “Deprived” means people who cannot come with unexpected expenditures, are late in paying their bills and loans, cannot afford an annual vacation, eat meat at least every second day and heat their dwellings to a comfortable temperature.

The largest problem in Hungary is that in 2012, 7.3 million people said they would be unable to cover unplanned expenses. In 2016, this number was 3 million – still a high one, but a vast improvement compared with the previous figure.

Economist Magdolna Csath said only savings allow people to cover unexpected costs and these savings increase as wages grow and debts fall, adding that the improvement also comes from gradually improving financial knowledge and the planning ability that comes with it.

Tamás Éder, president of the Hungarian Meat Industry Association said that over the past four years the number of those saying they cannot afford to eat meat every second day has fallen by 700,000. He said a contributing factor to this was the reduction of pork meat VAT to 5 percent in 2016.

Katalin Kardosné Gyurkó, president of the National Association of Large Families said the improvement also shows in other areas of consumption. More and more people can afford to buy new clothes or household appliances in a planned manner instead of struggling to replace worn ones. She also said that since the introduction of free textbooks a family with many children can save as much as HUF 50,000 (US$180) at the beginning of the school year.