Hungarian Household Consumption Second Lowest in EU

Hungary Today 2022.01.22.

Household (population) consumption has fallen in all EU countries. Only Bulgarian households have been consuming less than Hungarian households. This has been the case for years and it seems to remain so.

EU household consumption expenditure decreased by an unprecedented 8% on average in 2020 compared to the previous year, Eurostat reports.

The fall was due to the coronavirus epidemic and related measures: distancing measures, restrictions on the free movement of people, and restrictions on non-essential business activities also affected household consumption.

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No consumption was allowed in officially closed shops, restaurants, cinemas, etc., so households spent less. Moreover, the epidemic crisis has caused many people to lose their jobs (or at least their salaries to fall), and uncertainty tends to encourage households to cut back on spending and save.

Fact

Regardless of the epidemic, household consumption is a good indicator of what is colloquially known as living standards, or in the absence of living standards, poverty. For example, comparing household consumption expenditure with GDP is a much better indicator of how (well) the population lives. GDP has other components that have little to do with how much people spend on themselves.

Accordingly, there are significant differences between the Member States as to the causes of the downturn. Where the outbreak occurred earlier or more severely, or where more significant measures were introduced, this may have had a greater impact on household consumption. On the other hand, where the state has been more supportive in helping businesses and households through difficult times, this may have led to a more limited fall in consumption, liberal economic weekly HVG reports.

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Hungarian household consumption shrank by 4.6%, which is much better than the EU average. But among the countries in the region, it is a bigger drop than in Slovakia, Poland, and Romania.
Consumption of alcoholic beverages in Hungary increased by 3.7%, which is not an outstanding figure at all.
Overall, by product group, the change in Hungarian household consumption expenditure was broadly in line with the EU average.

Hungarian households have weathered 2020 relatively well by EU standards, but this does not change the fact that there is only one country in the EU where they spend less: Bulgaria. In other words, only Bulgarians are worse off than Hungarian households, HVG points out.

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