Hungary low on consumption compared to EU average
According to Eurostat, the EUʼs statistical office, Hungary is among a group of countries that are more than 30% below the EU average in terms of actual individual consumption (AIC) per capita, the indicator measuring material welfare. Based on this, Hungary is at a similar level with Latvia and Romania.
While the consumer confidence index recently compiled by Nielsen shows a satisfactory level of confidence in Hungarian society, a Eurostat study reveals a relatively low standard of living.
The EU statistical office looked at AIC per capita, a measure of material welfare of households. To further refine the results, Eurostat looked at AIC per capita expressed in Purchasing Power Standards (PPS), and how much it varied from the EU average in each country in 2016.
The survey found that this indicator is highest in Luxembourg, at 132%, and lowest in Bulgaria, at 53%. Hungary ranked just a little higher than that, at 63%, unchanged from the previous year. Compared to this, Poland had a figure of 74%, Slovakia 76%, the Czech Republic 78%, Austria 119%, and Germany 122%.
According to the Eurostat methodology, AIC consists of goods and services actually consumed by individuals, irrespective of whether these goods and services are purchased and paid for by households, by government, or by non-profit organizations. In international volume comparisons of consumption, AIC is often seen as the preferable measure, since it is not influenced by the fact that the organization of certain important services consumed by households, like health and education services, differs a lot across countries.
The PPS is an artificial currency unit that eliminates price level differences between countries. Thus, one PPS buys the same volume of goods and services in all countries. This unit allows meaningful volume comparisons of economic indicators across countries.
The full Eurostat news release is available here.
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