Household consumption in Hungary grew by 14% between 2002 and 2016, which is the lowest rate among the countries of the Visegrád Group. Moreover, the gap is expected to grow further this year, according to data released by economic research institute GKI.
Household consumption grew in the period 2002-2016 by 54% in Poland, 42% in Slovakia, and 36% in the Czech Republic, while in Hungary the rate of growth over the period was just 14%, GKI reports, cited by online news portal index.hu.
According to European Commission forecasts, the gap will continue to grow. By this year, households will consume barely 25% more in Hungary than in 2002, compared to over two-thirds more in Poland, 52% more in Slovakia, and 45% more in the Czech Republic.
Consumption of Hungarian households typically follows changes in real income only with a delay. This was clearly apparent in the period preceding the global crisis, notes index.hu, when the decline in real incomes of 2006 was reflected in consumption only two years later, while the same was also true of the upswing after 2013.
Household consumption per capita in Hungary calculated in euros according to purchasing power standards (PPS) approached by only 4 percentage points the average consumption of the EU-28 countries in the surveyed period, index.hu adds.
The low consumption growth is attributed to the global economic crisis of 2008-2009, which hit Hungary particularly hard, but also to the plans for economic reinvigoration that followed in 2010-11, which were inefficient, observes index.hu. The mass of foreign currency-denominated loans contracted by households (particularly in Swiss francs), combined with the devaluation of the forint, added to the problems, the report adds.