Incomes growing, but gaps widening

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Annual personal gross incomes averaged HUF 1.504 million in 2016 in Hungary, up by 4.4% compared to 2015, a summary of household living standards data published by the Central Statistical Office (KSH) on Friday shows.

Average annual net income rose by 4.2% to HUF 1.199 mln and, with consumer prices rising by 0.4%, real incomes increased by 3.8%. Around 70.1% of gross income came from wages in 2016, up from 69% a year earlier. Social transfers accounted for 28.3% of gross income, down from 29.0%, national news agency MTI reports.

Gross income per head from wages rose 6% from 2015 to HUF 1.054 mln a year, while social transfers per person rose 1.9% to HUF 420,000. In 2016, average gross income per head in households in the bottom decile was HUF 372,000 annually, up 1.6% from a year earlier, while in the top (tenth) decile it was HUF 3.666 mln, up 5.6%. Income was 25% of the national average in the bottom decile, and 244% of the national average in the top decile.

Gross per capita incomes reached the national average in households belonging to the seventh decile. The difference between per capita gross income in the bottom and top deciles grew and was almost tenfold. In households belonging to the bottom decile, the amount of income from social transfers exceeded wage income, while in the tenth decile, social transfers accounted for 19.8% of total income.

The Gini coefficient measuring income distribution was 28.11 points in 2016, dropping slightly after peaking at 28.59 points in 2013.

When comparing incomes to a national median and dividing the population into five categories, data show that the share of people in the "upper class" was slightly down at 6.7% in 2016 from 7.4% in 2015. The share of the "lower class" was also down at 6.7% from 7.8%. A broad trend evident since 2006 that showed the ratio of both the upper and lower classes growing and the share of the middle class declining thus changed in 2015 and 2016.

Regional differences

A regional breakdown reveals that gross per capita average income was still the highest in Central Hungary, at an annual HUF 1.707 mln, 13.5% more than the nationwide average. In this region, the ratio of the active population was 47.4%. Gross per capita average income was the lowest in the Northern Great Plain, at HUF 1.255 mln annually, largely due to the shortage of job opportunities, even though this figure was up 10.4% from a year earlier.

The regions with the highest inactive population were Northern Hungary (11.2%) and the Northern Great Plain (10.1%) in 2016. Regional income differences lessened in recent years, albeit slowly, the KSH noted. Nevertheless, the ratio of wage income within total income was the highest in Central Hungary, at 72%, while in Northern Hungary, social transfers accounted for one-third of householdsʼ total income.

There was a clear difference in personal incomes depending on the number of children raised in a household. Annual per capita net personal income for households without children was HUF 1.447 mln, but was only HUF 939,000 for households with children.

Single males living in independent households had the highest income, earning on average net HUF 1.739 mln annually last year. In households with a main earner aged older than 65 years, net average income was HUF 1.370 mln, while in those where the main earner was younger than 25 years, net income averaged HUF 929,000.

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