Inflation is receding after a record increase
Income mobility is low
Carbon prices are low
Households’ energy consumption is high
Economic indicators
Inclusiveness indicators
Sustainability indicators
Growth and confidence declined in 2022 and early 2023
Despite plummeting economic activity, the labour market remains historically tight
Strong wage growth fuelled inflation in early 2022
Headline inflation has declined but core inflation remains high
Recent inflation in Hungary has been largely driven by food prices
Higher agricultural input price growth led to higher food price inflation in Hungary
Aggregate profits increased in 2022 in manufacturing, but not in agriculture or trade
Inflation disparities between household income quintiles
The Central Bank significantly raised interest rates after mid-2021
The currency depreciated sharply in October 2022 but has recovered ground since then
Credit distribution to households and firms slowed down markedly
The anchoring of inflation expectations in Hungary is more fragile than before COVID
Real house prices are declining
Credit policy has become more prudent and is expected to limit mortgage risks
Economic activity has declined, especially in the construction and trade sectors
Monetary policy tightening has pushed up interest rates on loans
Business failures have increased
Non-performing loans are higher and bank capitalisation slightly lower than the OECD average
Fiscal policy expanded during the pandemic but remained accommodative for long
Debt servicing costs are rising, but debt is mostly in domestic currency
Hungary’s planned allocation of RRP grants over 2023-26
Hungary relies more on VAT and less on income taxes than OECD peers
Both VAT and turnover taxes are high in Hungary
Employer social contributions have fallen, but employee’ contributions remain high
Employment rates are relatively low among low-skilled workers
Addressing the fiscal effects of ageing is key to safeguard fiscal sustainability
Without further reforms, pension expenditure will increase sharply
The benefit ratio of Hungarian pensions is planned to increase between 2019 and 2070
Labour productivity in Central and Eastern European countries
The labour productivity slowdown is mainly related to within-industry developments
Business entry rates are lower than in other OECD countries in most sectors
The regulation of network sectors and professional services is relatively stringent
Few firms dominate markets in Hungary
Innovation and R&D expenditures are low
Communication prices are relatively high
Mobile services prices in France (January 2010 = 100)
Hungary has a less favourable insolvency framework than most EU and OECD countries
Further investments are needed to keep Hungary's Internet infrastructure at the frontier
The digitalisation of firms is lagging behind
Hungarian firms are lagging behind for the adoption of advanced digital technologies
The digital divide between small and large firms has widened during the pandemic
Generic digital skills should be improved
Digital skill shortages reduce gains from digitalisation in less productive firms
Corruption is perceived as high
Social transfers contribute to a low poverty rate in Hungary
The targeting of social transfers could be improved
Significant employment and pay gaps put women at a disadvantage
Only a minority of children under three have access to formal childcare
Income mobility across generations is low
Student achievements are closely related to their socio-economic background
Lower education spending contributes to lower education outcomes
The drop in GDP and hours worked during the pandemic was significant
The short-time work scheme had a low take-up rate during the first COVID wave
Employees in smaller firms and the lowest income deciles were more likely to work reduced hours and face monthly wage cuts during the pandemic
During the first pandemic wave, many workers lost unemployment benefits after 3 months or did not receive any
Economic costs of climate change
CO2 emission targets have become more ambitious
Energy use accounts for half of Hungary’s GHG emissions
Non-market based environmental policies dominate
Net Effective Carbon Rates
Net effective carbon rates for the buildings sector are among the lowest in the OECD
Price caps for electricity and gas generate Europe’s lowest energy prices
Households energy consumption is comparatively high
There is a large stock of old and poorly insulated houses
Housing insulation lags neighbouring countries and electrification is minimal
Residential buildings contribute disproportionately to emissions and pollution
Cars are the main source of emissions in the transport sector
Transport emissions are high even though car ownership is low
Average house price per square meter by postcode, Budapest
Public transport use is high and railway emissions are low
Environmental convictions been falling, and waste management relies on landfill
Hungary relies significantly on high carbon fuels and energy imports
Nuclear power is vital in domestic electricity generation
Impact of electricity supply disruption on output
Biomass dominates renewable energy generation
Welfare cost of premature deaths from exposure to fine particles, top ten OECD countries
Solar capacity has expanded rapidly, but grid investment is low
Flood insurance coverage and investment in the water infrastructure are low
Water usage is high in international comparison