Each year on July 1 the World Bank revises its classification of the world’s economies based on estimates of gross national income (GNI) per capita for the previous year. The current income classifications by GNI per capita are as follows: low income = $1,035 or less; lower middle income = $1,036 to $4,085; upper middle income = $4,086 to $12,615; and high income = $12,616 or more.
If we take a look at the figures between 2008 and 2012 we find that until 2012 Hungary belonged (just barely) to the high income group. But last year the GNI per capita dropped below $12,616, the cutoff number. To be precise, Hungary’s GNI per capita income in 2012 was $12,390. With this drop Hungary joined the group of upper middle income countries and left the high income ones.
The World Bank list that summarizes the changes between 2008 and 2012 is revealing in more than one way. Somewhat surprisingly, Hungary’s 2009 GNI ($12,980) was higher than the year before, but by 2010 it fell back to the 2008 level. The range over the first four years of the survey period, however, was not significant, as you can see from the graph below. By contrast, last year’s drop was substantial: from $12,860 down to $12,390. So, Hungarians are not living better. It doesn’t matter what Viktor Orbán tells his people about the brilliance of Hungary’s economic policies that the whole world should imitate.
All of the countries in the region with the exception of Hungary improved their per capita GNI. Bulgaria, the poorest country in the region, moved up from $5,700 in 2008 to $6,870 in 2012. With the exception of 2010, Romania improved every year (from $8,050 to $8,420). Poland likewise–from $11,870 to $12,670–which means that Poland moved into the high income countries while Hungary dropped out of this elite group. Although Croatia’s per capita GNI declined somewhat in 2012, the country is safely in the high income zone with a figure over $13,000.
This chart, which was published in today’s Index, is telling. For instance, Slovakia was far ahead of Hungary between 2008 and 2011 and shot up even higher in 2012, reaching $17,170.
Sharp-eyed observers noticed that while there were thirteen countries globally that moved into a higher category, there were only two that dropped into a lower one: Southern Sudan and Hungary.
Opposition politicians immediately responded to the news. Csaba Molnár (DK) recalled that in Brussels at the latest summit Viktor Orbán indignantly said that he found it strange that all those countries that are so unsuccessful at handling their own economies criticize the only country in the European Union that is successful. Molnár called particular attention to Lithuania and Latvia, two countries in the region that managed to get into the high income category. Latvia’s figures are truly impressive: between 2008 and 2012 it went from $12,020 to $14,180. Lithuania also did well: $13,850 in 2012 as compared to $12,000 in 2008.
In the Hungarian miracle economy, it turns out that the deficit (as of June) is much higher than expected. Unless revenues increase dramatically in the rest of the year, Hungary’s deficit will not be under 3.0%. Actually, in the first five months the deficit reached 3.8%. As the case of Cyprus showed, the European Commission can easily put Hungary under the excessive deficit procedure again if it fails to meet its target, which would be an awful blow to the Orbán government.
In order to avoid such a calamity yet another austerity package might have to be introduced. And if the state of the treasury doesn’t improve, the planned increase in teachers’ salaries as of September 1 will have to be scrapped. As it is, the current budget doesn’t include the several billion forints that would be needed to give a modest salary raise to teachers. That may mean that Orbán’s plans for raising salaries just before the election might have to be abandoned. According to one of the trade union leaders, it is more than possible that the majority of teachers voted for Fidesz in 2010 because of its promise to raise the very low salaries of teachers. For three years nothing has happened and the teachers’ patience is running out. There are more than 100,000 teachers in Hungary. That’s an awful lot of voters whom Fidesz may lose.
MSZP suggested that the figures on poverty that were due to be released in June are being held back. Opposition politicians suspect that the figures are horrendous and that’s the reason for the delay. Whatever the cause, one suspects that poverty has risen sharply since the inauguration of the Orbán government. When will the Hungarian public reach a point of no return?
As for the government’s efforts to turn Hungarians against the European Union, they have not yet borne fruit. The majority of Hungarians still think that Hungary’s place is within the European Union. Some opposition politicians think that perhaps the 2014 election should be a kind of referendum on Hungary’s membership in the Union. This might be a savvy political strategy. Especially if the opposition hammers home the dire consequences of leaving the EU and being isolated and locked inside the country’s borders after almost ten years of total freedom of movement across the 28-country Union. Show the people the changes that abandoning the Union would bring to their everyday lives–from an increase in the price of goods and an economic slowdown to needing visas to visit their relatives in Slovakia and Romania. I’m sure they would think twice before voting for a party that wants to keep the country totally independent. Independence has a price. Just as Hungary’s independence from Austria had a price. A very high price.
My two cents on road tolls, although this seems to be slightly off topic.
Yes, it is frustrating to buy the vignette, but I drove to Milan and back from Budapest recently (no direct flight and I do not fly with Ryanair) and the Italian highway tolls cost me about 100 euro (round trip). French toll roads are brutally more expensive than the Hungarian highway vignette. Austrian vignette is about the same price as the Hungarian, except that the Hungarian road network is more extensive.
Let’s keep things in perspective. Not everything is bad in Hungary and not everything deserve legitimate criticism.
I meant to say the Austrian road network is more extensive
@qaz. There are direct flights to Milano-Bergamo and Milano-Malpensa by WizzAir.
The pricing of food is a wonderful topic for discussion (no, I’m not being sarcastic).
Let’s see, if you hopped over, most banks would buy your dollars at a rate of around 220Ft/$1, so we’ll use that as the exchange rate for the conversion.
skinless chicken breasts $1.99/lb – that’s around 440Ft –> ~980Ft/kg –> pretty cheap
If you can buy them under 1,200Ft/kg, you can count yourself very lucky. And that’s broiler chicken – if you want the free-ranging kind (still talking about boneless breasts), that could easily set you back anywhere between 2,100Ft/kg and 3,000Ft/kg if bought in a hypermarket.
ground beef $2.49/lb – 550Ft –> ~1,220Ft/kg –> really cheap
Tesco Hungary’s online store has two kinds of ground beef, “Tesco Ground Beef” and “Tesco Finest Ground Beef,” priced at 999Ft and 1299Ft respectively, for half a kilo. That’s 1998Ft/kg and 2598Ft/kg!
boneless leg of lamb $4.99/lb – 1,100Ft –> 2,450Ft/kg –> sounds extremely cheap
Lamb is hard to come by in Hungary but our closest Auchan hypermarket has it. The imported leg of lamb, bone in(!), costs somewhere around 4,600Ft/kg! Tesco only carries sliced leg of lamb, at 6 495Ft/kg (1,299Ft/200g).
sliced bacon (16 oz) $3.99 –> 880Ft vs 1,200Ft (same amount) for Tesco branded sliced bacon
salmon ~$10/lb – 2,200Ft –> ~4890Ft/kg –> expensive
Auchan sells a whole (gutted) salmon at a lot less (per kilo) but it’s at least 5kg so you need to dig deep in your pocket (and then a lot of that is inedible – bones, head, fins etc.). Tesco currently sells fresh (ahem) boneless sliced salmon for 3 499Ft/kg so your price is indeed steep.
I think I’ll stop here – what we can see from this is that while some foodstuff (like salmon but I could have mentioned lettuce too) is clearly expensive in your corner of the world, other items are surprisingly cheap even by Hungarian standards.
I dont think it’s fair that the Hungarian toll is the same as the Austrian, especially considering the difference in incomes in the two countries and the quality of the roads. I can’t compare the extent of the two road systems, but the quality is much higher in Austria, at least the areas I’ve been in recently, and I’m sure there are far more bridges and tunnels to build and maintain in Austria.
We should all sleep easier tonight with the news that the Lukashenko and Orban regimes have pledged cooperation in order to fight the international financial crises-
Whether those measures will include Fidesz following up their Belarussian friends previous actions in the area of economic recovery by closing down university economics departments, locking up trade union activists or *disappearing* inconvenient journalists is not made clear.
I would be very surprised to hear any other EU state getting so cuddly with the last dictatorship in Europe but hey, at least Orban’s favourite lapdog Peter got a kiss out of it.
@Tryker: Don’t forget that Eva quoted the weekly specials.., these are special prices valid only for one week in one store that are used to draw people in and are substantially discounted. For example, in the stores around us (different part in the US), I see ground beef for $3.49- $4.51 per pound.. a substantial difference.
For price comparisons, this I think this site is better:
For example, ground beef in May 2013 was $3.461 per pound in the US (US city average, whatever that means).
Slightly off topic. But not really.
Apparently, social welfare was reduced by the government to HUF 22,800 per family per month. I found this topic via a Dutch blog http://www.kuifjeinhongurie.com, as I missed it initially.
A charity organization made the following youtube movie
Well, that’s still not terribly expensive. 760Ft/lb, which works out to approximately 1,690Ft/kg. And we did not even try to factor in income disparities – this is just simple conversion.
@Tryker: I’m not arguing that food prices seem to be higher in Hungary, only that not that much higher. Some of it also comes from the VAT (in the US there is no tax on food).
I have no doubts that life for the average Hungarian is more expensive and more difficult than for the average American, though I think to compare the living expenses and incomes would be a more complicated task than running a simple grocery check list.
Hey Cuties, (m. and f.) – not even worth speaking about the price of good old BEEF- Its nearly NONEXISTENT at the butchers shops, or at the supermakrets. I am dying for a good slice of filet mignon or whatever at ANY price but cant obtain it anywhere.
So my dear friends living in the USA and other ‘civilized’ environs… you got substantial advantages beyond the lower price of meat on your side of the world. Your wish can actually come TRUE!!!
(This may be the ONLY bad thing that ORBÁN is NOT really responsible for… but its worth blaming him for the rest ! 🙂
Sorry for your “beef problem” – Hungarians usually buy stuff like “marhalábszár” (hope I got it right …) from which my wife makes a fantastic pörkölt …
Now even more OT:
A few years ago it was almost impossible to get the better pieces of meat (even a pork filet aka szüszpecsenye was difficult) – because the good stuff was sold to restaurants. Luckily that has changed …
But the general point is still true:
Life in Hungary ain’t cheap – prices are comparable to other countries like Austria, but incomes are only a fraction of what people make there!
Since when did ‘fairness’ have anything to do with life in Hungary.
Do you know how parking payment on the streets work? Well, in civilized societies, you have a meter. An hour is an hour, that is to say, if I move my car after 20 minutes anyone else can enjoy the remaining 40 minutes. Hungary? Well, you buy time from a machine and stick the paper in your car. If you bought two hours worth and left after 20 minutes, your parking spot is taken by another car who must buy time all over again. Suppose he pays 2 hrs as well and leaves after 20 minutes…the parking boys have given parking for 40 minutes and been paid 4 hours. Nice, huh?
Fair? No. Hungarian? YES.
Sorry I disagree. VO and Torgyan are responsible for killing the milk factories and the milk cows and the rest of the cow meat in Hungary.
As to not getting steak you may want to try Mestersteak in the Budahills.http://www.budapestguide.org/meszarsteak-meat-store-in-budapest/
Furthermore, if you really want to pay a high price for this type of meat, try some restaurants
or alternatively buy them online from the UK or USA. If from USA expect significant VAT and import duties.
The point is, in the UK you CAN buy expensive if you wish. But you can buy cheap, too. On a recent visit, I made a spot check of basic household items on sale in Lidl and Tesco – 100% of the identical products are more expensive in Hungary (where income for most white collar state employees is about 10% (net, natch) of what it is in Britain). Enough said.
Tyrker, my prices are somewhat misleading because they are “sale prices.” For example, the butter price I mentioned was about half what it normally is. So, instead of $3.00 per 16 oz (1 lb) it is normally $6.00. But after my next trip to the super market I will give more detailed prices from cheap to really good meat.
The ‘Tesco Value’ range of products, for example (a comprehensive basic selection) doesn’t even EXIST in Hungary.
However, not all of this is Orban’s fault. There’s also a kind of snobbishness here – even some very poor people I know would never consider going into a Chinese supermarket etc (even extending this snobbishness to the piac), but in England even the well-off will quite happily pop in to Poundland or Aldi or Primark. It’s the same thinking behind most people turning their noses up at the really very cheap train services in Hungary – trains, you see, are for ‘low’ people.
Thing is, most cattle raised in Hungary are milking cows – not the sort of breed that’s kept primarily for its meat. This means that the meat exhibits little to no marbling, and even the parts normally best suited to searing, pan-frying or roasting need to be braised, stewed or otherwise slow-cooked.
andy, if you want a decent slice of filet mignon, rib-eye steak, T-bone or porterhouse steak, your options are indeed limited but not quite nonexistent. You can either order from primecuts.hu and have it delivered to your door, or visit one of the few butchers that do carry USDA Prime quality stuff like MészárSteak in the recently opened Hegyvidék mall or Konrády’s in MOM Park. Mind you, these vendors aren’t cheap – but you did say any price, didn’t you?
Charlie: “The email is currently unsent – I’m still looking for the correct Government department.
Should I send it?”
I would not do that. The man was not honest, that’s for sure, but you should not be an “informer” of OV or collaborator of the regime. In an autocracy (or dictatorship) you cannot say which way is the “morally superior”, to undermine the regime through sabotage (which your Mr. Racz is doing, even if at your cost), or by being honest (making sure that OV can praise his policies, as people behave “properly”). For me he gave you an (expensive) lesson in some moral dilemmas once you enter a world where “impartial rules” cannot easily become reality.
OK ‘guys’ (m, f, as usual…) now I got some goodie for you which we (in Hungary) are surely number 1 at, and I’m supplying genuine fresh pictues and local prices to boot:
Ah have friend in London who came to vist last week to BP. Our meeting was based around a lunch at a resto.
Before he was willing to enter the resto he insited on Pastry Shop as a pre-hors’oevre.. (he was STARVED for Hung. Patries. After a complete dinner of quality we came out and as soon as we went past another pastry shop he said: That’s it Were going in here NOW. He was DYING for Hungarian pastries. – Price was no problem 🙂 of course…
So since I been teasing him by emailing him pis of various patries we’re consuming as a matter of course – hping to “csalogatni” him back for more…
So heres the low down for the quality/price ratio… Were probably unbeatable (oh you’ll always find womeone wholl perk up with something cheaper — but here’s the low-down:
Dobos Torta 159 ft per slice (see the item in question – fresh!)
Meggyes pite 169 ft
Flódni (the slice with apple, walnuts and ground sweetened poppy-seeds…) 179 ft…
Thats about 75 US cents a slice, 60p in English currency, or about 70 eurocents a piece. Made from genuine cream etc.Bought in a quality pastry shop.
OK, this is outside of BP where the price in a cukrászda is double this but still methinks we sweep the medals of quality (and even hygiene in this instance…)
Check’em out for loooks click on da pix to get the todal… effect
I also know of a great cukrászda outside Budapest – Tápiószecső to be precise -, which is called Hysteria (for some obscure reason).
Ha ha ! Something tells me you dont mwanna go there ! In that case stay where you are..
you do not need to go outside Budapest.
I like Daubner (http://daubnercukraszda.hu/) and Sik (http://www.sikcukraszda.hu/). but if you insist outside Budapest I would go to Soltvadkert (http://www.szentkoronacukraszda.hu/).
OT, reading the comments on the FT guest editorial (nice post Stevan!). It’s interesting how the trolls always manage to ignore facts and just pick at the edges with meaningless rhetoric. Speaking of trolls, we’ve not heard from the usual bunch yet. I guess they are off busy with damage control on other sites (such as FT).
Salary question: I’ve always been amazed and bewildered by the salary situation in Hungary. As for prices. from my perspective they are all over the map. Strawberries this year didn’t make it much below 800/kg.. at least for any you’d want to eat. We go to the market but I really have never found it to be cheaper than the Spar but than we get much better quality than Spar can offer so there is a trade-off there. As for the other fish items.. forget it, they’re no where to be found. I think I once saw a single poor frozen lobster in Spar but that was years ago. Mostly what can be found is catfish and the infamous ditch fish which I can’t say that I enjoy. The catfish is farmed and it taste like it (yuck). About all of the fish I’d eat is frozen and the packaging sometimes only claims 40% fish which leaves one wondering. 1kg package is 400g fish and 600g of ????. All in all my wallet leave Spar lighter than it leaves a similar chain with similar items in the US.
The argument requires a basic understanding of economics and a definition of fair, progressive.. etc… without that you’re wasting your breath 😉
@qaz, I couple of years ago I spent 6 hours on the highway in Italy queued for a toll booth. The charge, 1.20€s. I was so upset I could have… I would have loved to of had a sticker option even at a higher price. Now I have a year long sticker so I just don’t think about this any longer.
Indeed. Collecting cash at toolbooths is a very expensive prpoposition compared to elelctronic surveyaance of license plates to automatically check if your car is paid for into the syustem for the current year as a bona fide user… It’s a question of economics. To the user it may seem unfair and may in fact be so but for the majority of users and the government maintaining the roads it’s the most efficient system.
In the average user’s view and the efficiency of running the auto-strada high-way, the yearly pemit comes out as the winner in overall efficinecy and cost of operation.
In fact, per user it is not the fairest but overall it’
s the fairest sytem for all concerned. Throw out the ego and go for the good for all… If its hard to stomach, rethink your own attitude toward your ‘brothers’…
@andy. In Italy you can also buy a “Viacard”. It’s like a debit card, you don’t have to queue but can go straight to a marked lane. You shove the card in, the amount is deducted, the card pops out and off you go.
In my opinion, instead of tolls the state should just raise the tax on gasoline – that would also help the environment and the system cost would be much lower …
In Austria you have a double system: You buy a matrica (Vignette) for the Autobahn – but for some tunnels you pay extra. And even there you have the option of paying a lump sum for 12 months. That is a very nice solution because your license number is entered into the computer and you can use a special lane instead of having to wait at a toll booth – and in high season the queues can be really long (like in Italy …)
All of these systems have their faults of course.
But for Hungary the basic problem remains:
Many products are just too expensive for the average earner!
Wolfi: I agree with you, and I found the road conditions in Austria, Germany and some other European countries very good. However, in Hungary and other former CEE countries the road conditions are terrible. The money they collecting goes directly to maintaining the roads.
Unfortunately, in Hungary the revenue is not used solely to maintain and expand roads, but goes directly back into the coffers of the government. That is way I believe any system is currently another way of collecting tax, whether E-toll, matrica or vignette. Or in the shops E-till, etc.
In Haza es Haladas.hu have a very good article on this. http://hazaeshaladas.blog.hu/2012/06/15/magyarorszagi_utdij-valtozasok_a_hasznalat_erteke
Having travelled through many countries to get to Hungary – many times – I would like to appeal for some fairness to those countries which provide a good road network for others to traverse through.
So from a pious and selfish perspective:
Rule Number 1
All motorways should be three-lane. A 21st century commerce requires 21st century infrastructure.
And pretty coloured reflectors to separate lanes – red, green and orange! – When I arrive back in England you are met with a three lane motorway at Dover which sparkles like a christmas tree! In the absence of full lighting – this is a must.
(Most of our motorways in a small overcrowded island are three lane.
As in America, some are 4-lane and the heaviest used – the M25 – is 5-lane.
Three lanes, with the banning of lorries in the outside lane makes for much safer driving.
Two lane motorways are so dangerous when constantly having to share them with lorries – and impatient continental drivers who insist on almost getting into your boot (trunk!) as you overtake lorries. This ‘tailgating’ is stamped on heavily by the police in the UK and is a much rarer occurrence. Germany takes the award for most suicidal tailgaters.)
Rule Number 2
There must be no tolls or motorway charges – ANYWHERE!
If you must charge – charge the most to the people who use them most. (Do I really need to say this?). A day trip to Budapest involves a weekly, or expensive, ticket. And will the new E-tolls make Budapest even more expensive? Milk the motorist and tourist – why not?
If you come to England all our motorways are free. (ok the Dartford Bridge is pay, and a private, experimental section, is a toll for a section of the M6).
Lorries from the continent don’t have to pay anything – so food exported by you to us is cheaper than food exported to you, by us.
And your new tolls will have a skewing effect on already high food charges for the poor, poultry, for example.
Rule Number 3
Motorway services must be free to use and properly maintained.
If you come to England you can stop at motorway services and use the loos, hot water, showers, etc for free, in cleanly maintained facilities. The food is truly awful – but the facilities are clean!
Hungary has very very few (but not much motorway!) and small facilities. But they score a few points here for mostly being clean.
The number of times I have used the 70 cent facilities and there has been no hot water – especially in Germany. Germany would score better if its free stops weren’t so disgusting.
Austria scores highly here – they even supply outside weatherproof ‘recliners’ for drivers to rest – and some are free. Amazingly too they provide free Wi-fi!
Rule Number 4
If you must impose tolls – they should be hypothecated – until the standard of your roads meets a certain level.(And stop building those opulent oversize roundabouts!)
The lorries leaving Hungary for Slovakia use a one-lane-each-way-fast-death-trap of a road. There are two many of these death traps in Hungary. As a priority they should all have central reservations and even kerbs (and paint!) – so at least you can see the edge. Such is the nature of the press that these gory accidents feature highly because either a) That;s all Kisalfold thinks the insular Hungarian is interested in, or b) they really are nasty accidents.
No kerbs must make snow clearing easier though!
Once outside cities and villages they should be ‘dual carriageways’ – which in England means with a separating barrier in the middle.
Rule Number 5
ALL roads should have kerbs!
Only in Hungary do most roads outside large towns not have kerbs! At least spend your unfair tolls on a decent standard of roads please.
Rule Number 6
We should be able to use all SatNav facilities anywhere.
(Don’t get ideas Orban!). The French have just specified that you are no longer allowed to be warned of speed cameras. They will stop you and inspect your SatNav and if any warn of cameras in France – instant large fine. (And I bet they get a cut too! So when traversing France you have to hide it and all traces of suckers on the windscreen etc. Cat and mouse.
– or buy a new Satnav which now just warns if a road is ‘dangerous’ where before they told you where the camera was! More cat and mouse!
In the best tradition of Jeux Sans Frontières my finaly scores are:
England 9 (mostly right! – well I would say that wouldn’t I?)
Hungary 6 (Everything wrong except the dangerous lottery of flashing traffic lights after midnight (which keeps you awake!) and the countdown traffic-light wait time – brilliant!)
Austria 5 (Getting better – but vignettes and too many 70 Cent charges)
Germany 8 – (Terrible free loos – but no charges; much motorway, with many three or more lanes – but too many suicidal tailgaters.)
France 4 (Mainly because of their arrogance and we can never award the French anything!)
Belgium 5 (Dead straight! Mainly 2-lane – but many pathologically insane drivers!)
(Fairness was not one of the criteria!)
@Charlie: “There must be no tolls or motorway charges – ANYWHERE!”
Great idea… only nothing is free. This only means that roads are maintained from taxpayers’ money…so everybody gets “charged”, using the motorways or not.
An Yes, even I don’t really believe in Father Christmas – even if I did mention the Christmas tree!
I actually believe (you lefty! Charlie!) That ALL infrastructure should be paid for by general taxation as it benefits everyone……
I think most would agree to some extent – just where to stop would be a right royal argument.
But roads are best managed nationally in my view. They are then gradually upgraded to the same standard nationally.
In my village (in Hungary!) you have the ludicrous position of a beautiful ‘specced’ road running through well maintained houses – unused except by the inhabitants – making for higher house prices (all paid for by the EU btw) and the main road in a dreadful state.
I assumed that there must be a Fidesz counsellor living in the road!
Imagine the patchy results at motorway level?
All in all, half of the population try to live on under poverty level incomes, while there is a new class based system in the making, feudalist oligarch and vassal – and the Lord Sire…
Is this really the Hungary, what the people – even the Fidesz supporters – wanted to have in 2013?
If “YES” – then you have it, here you are!
But, if “NOT” – why don’t you do something about it?
Send home Viktor to his green pastures to play soccer, for starter, the rest will follow, you’ll see!
@Charlie: “I actually believe (you lefty! Charlie!) That ALL infrastructure should be paid for by general taxation as it benefits everyone……”
As for infrastructure, I’d rather spend taxpayer’s money on cheap public transportation and make people who want to use their cars pay for the true environmental costs of the luxury.
Hey cuties! Toll/no Toll, just lemme outa’here ! I’m willing to pay full fare for the first flite out. to anywhere but ‘here’… 🙂
An just as a hypocrisy check – do you use/have use of a car?
And tell me how ‘green’ you are please!
@CharlieH: No, I don’t drive and I don’t have a car .. and I live in the US. It isn’t easy, and truth to be told, I get a ride from my husband once a week to do grocery shopping (he does have a car, so I guess we do have a car)… it’s impossible to shop without a car around here (bad, bad public transportation system).
When I lived in Budapest, I practically never used a car…. never really needed to, as I could get anywhere in the city using public transport. I never thought I will have fond memories of BKV, but I do.
Thanks An – brave woman!
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