According to fresh data from Eurostat, Hungary’s GDP measured in terms of purchasing power parity (PPP) was 2 percentage points closer to the EU average in 2021, up from 74 percent in 2020 to 76 percent last year.
Hungary has achieved the biggest improvement among the Visegrád countries, with Poland catching up by 1 percentage point, and the Czech Republic and Slovakia moving 1 and 2 percentage points, respectively, away from the average. What is perhaps even more important, however, is that Hungary moved up one place in the GDP ranking, overtaking Portugal, an EU Member State since 1986.
Commenting on the news, Századvég analyst Gábor Regős said Hungary’s catching-up was most intense during the current cycle, with a convergence of 6 percentage points between 2017 and 2021.
“This shows the lingering effects of the 2008 crisis but also refutes the view that the growth of recent years is only due to favorable external conditions or EU funds,” Regős said.
Further wage growth; an increase in domestic ownership; and, perhaps more importantly, a shift to higher value-added activities, including the development of education, will help to drive progress. All of this is encouraging for the government’s position that creating a workfare and knowledge-based society pays off better than handing out aid and why it stuck with this strategy even amid the coronavirus epidemic.
It is worth noting that even during the pandemic, we were approaching the EU average, proving, in an EU comparison, that Hungary has managed the crisis effectively and pursued responsible economic policies. GDP growth in 2021 was 7.1 percent, the most rapid in Hungarian economic history and far above the EU average, providing scope for several tax cuts, rebates and wage increases.
Our goal remains to keep Hungary at the top of the EU growth table, which will be supported by our policies based on tax cuts, investments and full employment.