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Hungary’s Economic Resilience vs. Romania’s Challenges

Hungary Today 2024.05.10.

Minister for National Economy Márton Nagy, responded to reports suggesting Romania has economically overtaken Hungary. He argues that while Romania’s GDP per capita may have caught up with Hungary’s by 2023, it does not reflect living standards or satisfaction levels.

As Index reports, the Minister introduced the Harmonic Growth Index (HNI) to measure sustainable growth, where Hungary ranks 29th globally compared to Romania’s 46th in 2021.

He highlights Hungary’s stable external balances compared to Romania’s deteriorating ones, and Hungary’s decrease in public debt versus Romania’s increase. Hungary’s export-driven economy contrasts Romania’s reliance on domestic demand.

While both countries saw real wage increases, in Romania, it was heavily influenced by minimum wage hikes, with a larger proportion of workers earning at that level.

Hungarian households hold more wealth compared to Romanian households, and Hungary has a lower poverty rate. Romania has experienced significant emigration and a decrease in employment since 2010, while Hungary has attracted more workers. Hungary’s export profile, especially in high-tech, surpasses Romania’s.

Márton Nagy points out Hungary’s higher ranking in the Global Innovation Index and better living conditions, including indoor facilities, financial resilience, and life expectancy. Utilities are also more affordable in Hungary than in Romania.

He attributes Hungary’s stability to its work-based and inclusive economic model, contrasting it with Romania’s consumption-driven approach.

Despite similar economic performance, Hungarians are less likely to emigrate, suggesting higher satisfaction with their standard of living. Nagy attributes Hungary’s political stability since 2010 to its superior living conditions compared to Romania’s frequent changes in government.

Mr. Nagy’s response underscores the multidimensional nature of economic performance, emphasizing that GDP alone does not capture the quality of life or societal well-being. He contends that Hungary’s model, focused on sustainable growth, innovation, and social welfare, offers a superior standard of living compared to Romania’s consumption-driven approach.

The Minister emphasizes the importance of innovation and competitiveness, citing Hungary’s higher ranking in the Global Innovation Index and its export profile, particularly in high-tech products. He argues that these factors contribute to Hungary’s overall economic resilience and better prospects for long-term growth compared to Romania.

Furthermore, he addresses disparities in living conditions, such as access to basic amenities like indoor facilities and affordability of utilities.

Mr. Nagy asserts that Hungary offers a better quality of life in these aspects, contributing to higher satisfaction levels among its population.

In conclusion, the Minister’s analysis presents a comprehensive comparison of economic and social indicators between Hungary and Romania, highlighting Hungary’s superior performance in various aspects of well-being and emphasizing the importance of a holistic approach to evaluating economic success beyond GDP alone.

Minister for National Economy States Economic Growth Will Resume Next Year
Minister for National Economy States Economic Growth Will Resume Next Year

He cited encouraging signs of consumption recovery, with retail sales and food consumption showing improvement.Continue reading

Via Index; Featured Image: motorauthority.com

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