The past seven years: Hungary in numbers, 2010-2016

Máté Veres, research associate of Gazdaságkutató Zrt., published this study in Új Egyenlőség at the beginning of the year. The article was translated by “Observer,” who added the following notes:

This article offers a set of indicators to reveal the state of the Hungarian economy and society. We think, however, that the situation is somewhat worse than Veres’s assessment because there are additional detrimental factors not discussed here, e.g.:

  • The very low investment rate as a percentage of GDP
  • The budget deficit hidden in subsystems down to individual units like hospitals or schools districts
  • The consumption boost by the remitted earnings from abroad, which are to decline in time
  • The poor ratings of the Hungarian places of higher education, the outdated, retrograde education model and policies, the very low number of people with IT or foreign language knowledge, etc.  

Analyses of these points will eventually be presented in another article. I’m grateful for the work and care “Observer” took in translating this important article for us.

♦ ♦ ♦

Analyzing the results of the second Orbán government [and third as from 2014] after seven years of freedom fight and other kinds of struggle and hundreds of millions of euros from the EU spent, it’s time to draw a picture of how the Hungarian economy and society are doing compared to 2010 in the light of the latest figures available.

After [the election victory in] 2010 the government benches have been widely using the already well known “past eight years” phrase. It was used by Fidesz and the Christian Democratic politicians as their favored counter-argument when the opposition tried to challenge government actions. The performance of the governments between 2002 and 2010 in many areas could have been criticized (as we did in our analyses), but in general the “last eight years” argument has always been a simplistic communication tool, often used to bypass substantive discussions. In our evaluation of the Fidesz government performance we now follow a different path and instead of summary political statements we shall stay with the facts and figures to show what the “past seven years” were like.

Seven years are already a sufficient horizon for an evaluation of the government’s achievements. For this purpose, however, in addition to showing the changes in numbers, we need to find explanations for the results, and therefore – where possible – to compare the results with those of our regional competitors as well. So now we’ll consider some areas of key importance to the future of the country.

UNEMPLOYMENT

It was 10.3% in 2010 and only 5% in 2016, according to the KHS (Central Statistics Office-CSO), or 6.8%, according to Eurostat.

Apparently the situation has improved, but it is worth adding that the [2008 world financial] crisis played a major role in the exceptionally weak 2010 numbers, while the much better 2016 numbers include both those working abroad and those fostered workers vegetating on subsistence wages (USD 180/month).

The same factors underlay the Eurostat numbers showing a miraculous growth of employment in Hungary (59.9% in 2010 and 68.9% in 2015). According to official figures we caught up with the EU average, but without those working abroad and the fostered workers we just caught up with the eastern [EU] member states. In any case, there is an improvement, primarily due to the EU-funded, labor-intensive construction projects.

HUMAN DEVELOPMENT

2010 – 36th place, in 2016 – 44th

Human development is an indicator introduced by the UNO, a concept of human well-being wider than the GDP indicator. It is generated by averaging three numerical indicators: life expectancy, education and standard of living (GDP Purchasing Power Parity per capita). In this area we not only managed to fall significantly behind, but all our V4 [Poland, Czech Republic, Slovakia and Hungary] regional competitors overtook us, while Poland was still behind us in 2010.

HOUSEHOLD DEBT

EUR 7,844 mil in 2010, 5,683 mil in 2016

A clear success can be booked in this area. The composition of the debt is just as important as its size, as the crisis taught a large part of the Hungarian middle class. Until 2010 the household debt of the Hungarian population grew at a rate remarkable even by regional standards, and in foreign currency, which was mainly due to the bad interest rate policy of the Hungarian Central Bank (HCB) and to the lack of regulation. The central bank’s interest rate policy between 2001 and 2007 encouraged the population to borrow in foreign currency.

PUBLIC DEBT

In 2010 the PD was HUF 20,420 billion or 78.8% of GDP. Seven years later, in 2016 it was 25,393 billion or 75.5% of GDP.

This figure has fluctuated during the second Orbán government. It had been over 80% GDP too, but at the end of the year ‘with hundreds of tricks’ – the best known being the seizure of the pension finds – they always managed a decrease from the previous year [the government publishes and uses only a single figure – that of Dec. 30th). There is a lot of uncertainty as to whether the government can sustain the downward trend, given the scale of the debt, but if it manages to keep the balance of payments at zero, the government can eventually claim a clear victory on this front.

TAXES ON LABOR

In 2010 the total was 54.1%; in 2016, 49.0% There is a sizable literature on the issue. The differentiated and on average higher taxes on labor and/or profit are not at all problematic, if they are used by the state to provide high-quality, accessible to all, health, education and other services. This is evidenced year after year by the results of the economic systems of Sweden, Norway, Denmark and Finland, known as the “Nordic model”, since the above-mentioned countries have figured at the top of the lists in competitiveness, innovation and the environment for decades. However, in Hungary things are developing in a direction exactly opposite to the Nordic Model. This question is also interesting because the Fidesz government proclaimed itself to be the government of tax cuts.

Social security expenses in the European Union, 2014

It is clear that if we look at the overall situation, the taxes on labor have decreased. Although it’s worth adding that in international comparison while in 2010 we had the second largest burden rate in the OECD, by now we managed to move up only by two places, occupying fourth place from the bottom. This small success is mainly due to the introduction of a flat personal income tax and its rate reduction to 16%.

However, it’s worth mentioning that the replacement of the progressive tax system used until then by a flat tax rate opened a HUF 444 billion hole in the yearly budget and benefited only the richest. In addition, never has labor in Hungary been burdened by such a wide variety of taxes as today. Actually the situation here is the worst in the region. Meanwhile the government promised a massive tax burden reduction in the medium term and a single-digit company tax. There has been a long-standing debate about the need for a significant reduction of the tax burden with regard to the competitiveness of the economy.

In any case, despite the 2010 promise, we surely didn’t get any closer to the “beer mat-sized tax return” [as V. Orbán half-jokingly promised in opposition]. However, with the new flat and extremely low 9% company tax rate, another 2010 slogan – “we shall fight the offshore knights” – now seems to have morphed into “join the offshore knights’ race.” Similar to the effect of the flat-rate personal income tax, now once again the richest (and the big companies) will do really well as not the Hungarians, but the multinationals, such as General Electric (GE), already did under a special agreement with the government.

GDP GROWTH

Between 2004 and 2010 the growth amounted to 9.9% or in absolute terms USD 114.2 billion to 129.4 billion (a 15.2 billion difference). Between 2010 and 2015, in the same length of time, the Orbán government boosted the GDP from USD 129.4 billion to 138.8 billion (a 9.4 billion difference). The right side of politics clearly underperformed. These numbers, however, may be deceptive because much depends on external factors. But if you just look at our competitors in the region, save for the Czechs and Bulgarians almost all Eastern European member states, even Romania, performed better.

PUBLIC TRANSPORT

The [public transport] ticket price in Budapest in 2010 was 320 Ft., in 2016 – 350. The ticket prices in the region were as follows in 2016. Sofia – 158 Ft., Bucharest – 90 Ft., Warsaw – 240 Ft., Prague – 275 Ft. So the situation remains unchanged, we are the most expensive.

FREEWAY CONSTRUCTION COST

During the Gyurcsány government overpricing [in public projects] gained notoriety, but there are still no authoritative studies regarding its extent. Interestingly, according to Zsuzsanna Németh, Minister of Development 2010-2014, the Hungarian freeway construction cost per kilometer had decreased steadily during the Gyurcsány government, and in 2010 was 1.8 billion Ft. on average. Compared to this, according to the same Ministry led by Zsuzsanna Németh, the freeway construction unit cost had increased to 2.3 billion per kilometers in 2013. But there were also sections where the costs reached almost 4 billion forints.

BIG MAC INDEX

[Or how many minutes you have to work for a Big Mac]

Crisis or not, the change here is clearly positive: in 2009 – 59 min., in 2015 only 44 min. That said, we still haven’t overtaken anyone in the region, we are on par with Bucharest. It is also important to point out that the Big Mac index focuses on cities, and while Budapest is clearly catching up, the country is dropping behind compared to the other EU Member States. And this worsening trend continued during the past seven years just as before.

BUDAPEST (CENTRAL HUNGARY) GDP PPP / CAPITA compared to EU average

In 2010 144%, in 2014 143% where 100% means the EU average

Only Budapest is above the EU average, the second best county – Győr-Moson-Sopron stands at only 77%. In the light of the foregoing it is worthwhile showing also how the best performing Hungarian regions – where the situation in this area has worsened since 2010 – compare to our V4 competitors. In 2014 in the same category Prague was stood at 173%, Bratislava 187%, Warsaw 197%. Notably in the case of Budapest, Pest County is also part of the region.

GDP per capita by purchasing power parity, 2015

IMPORTED FOODS SHARE

In 2010 24.5%, in 2015 22%

The more food is produced by local, domestic producers the better, both environmentally and economically. According to a relatively recent Corvinus University study, positive, if modest changes have taken place in this area.

THE REAL VALUE OF PENSIONS
It is so far growing in the second Orbán government period, due in part to last year’s persistently low inflation, the third year in a row, and, on the other hand, partially due to the inflation-indexation of pensions introduced by the Gyurcsány government and which during the Fidesz government was often surpassed through the use of small tricks.

MATERNITY LEAVE

In 2008 the gross benefit was HUF 28,500, in 2016 just as much. In international comparison, this is dramatically low.

PRIMARY SCHOOL TEACHER GROSS ANNUAL WAGES

In 2009 it was USD 9,500, in 2015 – 9,149.

The biggest change in the area of earnings in the past period, as mentioned before, was the flat personal income tax, which benefitted primarily the affluent. At first glance the above seems even a decrease, but due to the significantly weakened forint exchange rate in the period the balance is rather a positive one. This fact doesn’t make for any exuberant joy because according to the OECD data, admittedly in need of updating, the approx. USD 9,500 earnings (just as a few years ago) was sufficient only for the last place among the EU member countries.

PEOPLE LIVING IN EXTREME POVERTY

In 2010 – 3 million, in 2016 – 3.6-3.8 million

In addition to this terribly high number, perhaps it is most important to note that after nearly a quarter of a century, in 2011 the CSO stopped publishing any figures about exactly how many people live below the poverty line. (The Policy Agenda think tank, however, has calculated that by 2015 the number has grown to 41.5%. See our article on all of this.)

Actual Individual Consumption in the European Union, 2014

Furthermore, the CSO had calculated that at least 87,351 Ft. monthly net earnings were required (in 2014) for living at a subsistence level. In comparison the net minimum wage in 2016 was still 73,815 Ft. In the first case it seems there was finally a move forward. Thanks to the tenacious struggle of the trade unions in 2018 the minimum wage will reach the subsistence level of around 90,000 Ft. However, thanks to the far higher 35% tax burden, in net terms the minimum wage is still light years behind that of our competitors in the region regarding the increases carried out between 2008 and 2016. In addition, Hungary has the highest proportion (72.2%) across the EU of households that wouldn’t be able to pay any unexpected expense.

HOSPITAL BEDS NUMBER

In 2009 – 70,971, in 2014 – 66,000

The population has been declining steadily since 2010, but we surely aren’t so many fewer. Actually there are more elderly. Therefore we need more, not fewer beds.

HEALTHCARE

Not only compared to 2010, but in fact never has any government since 1990 spent so little on healthcare, as a percentage of GDP, as in the past several years. And this is not only a basic requirement for a more successful functioning of the economy but also a factor that could have improved significantly the overall mood of the whole country. Recent research has shown that the overall satisfaction level in a country is not best raised by increasing the earnings of the inhabitants but by spending relatively larger amounts on problems of well-being. There is also a demand for it. According to the 2016 European Social Survey the Hungarian society is in a terrible state compared to the other European countries: in Hungary people consume the smallest quantities of fruits and vegetables, Hungarian women are moving the least, compared to the Hungarian men only Lithuanians smoke more, compared to the Hungarian men only more Czechs are overweight, Hungarian women are the most overweight, we have the largest proportion of men in poor or a very poor state of health, compared to the Hungarian women only the Spanish women are in a worse state of health, among the Hungarian men are the most showing signs of depression, and the Hungarian population, both men and women, is most affected by cancer. After that, perhaps it’s not surprising that we visit doctors most frequently among OECD countries.

EDUCATION

Similar to the health care case, counting from 1990 we have never spent so little of the GDP in this sector as during the Orbán government. Yet the word education could safely be replaced by “future,” since it is basically influenced by the country’s medium and long-term competitiveness. We are rank penultimate in Europe [in spending], so such investment here would bring the biggest return among the OECD countries. The results are visible: we are sixth from the bottom in the OECD in the number of researchers employed in the country; there haven’t been so few studying in higher education in the last seventeen years. We spent the least for developing computer skills, and our students have the largest number of school hours for non-essential knowledge (e.g., ethics [compulsory alternative to religion], etc.) as opposed to essential ones (e.g. reading, writing, literature, mathematics, natural sciences, second or other language). In view of the above, the recently published PISA results, which understandably caused an outrage, probably represent only the tip of the iceberg.

One of the few positive steps in the past few years is that those who cannot find work are, finally, offered free training, but the training offered by the National [Vocational] Training Register (Országos képzési jegyzék) is unlikely to boost the highest added value production areas. In addition, the participants’ livelihood is not guaranteed during the course; hence the training can only be used by jobseekers with a better financial cushion or those enjoying a patronage. Improving job qualifications is needed to raise our incredibly low average salary, which already inhibits economic growth.

CORRUPTION PERCEPTIONS INDEX

In 2009 – 46th place, in 2015 – 50th place

Even the people in Saudi Arabia, Botswana, Qatar and four-fifths of our region feel their governments are less corrupt.

ENVIRONMENTAL PROTECTION

No previous government has shown less interest in this area. The Orbán government’s response to the day-by-day worsening problem of global warming was to abolish the Environment Ministry and to do nothing about the few concrete promises it made before the election – including the creation of a green bank. In the meantime, they managed to earn the glory of the “tree-felling government” title, since probably no one has cut down so many trees as they have done in the last seven years in Budapest, and they have plans for more. Moreover, we are perhaps the only country in the world to impose taxes on solar panels while indebting Hungary by a loan equal to at least 10% of GDPif not more – for the sake of a twentieth-century technology for [Russian nuclear reactor blocks] Paks 2, which, in the bargain, will surely never produce a return.

Meanwhile, despite all the flag waving and freedom fighting the external exposure of the Hungarian economy has not been reduced at all. And here it is not primarily the foreign currency denominated debt segment that counts most, nor the export-import volume, which reached 200% of GDP, but the fact that less than half of the exported added value is created in Hungary. In other words, more than 50% of the added value produced in Hungary is by foreign-owned companies, which is unique in the European Union. It is no surprise that of the EU money arriving here for business development – after the government has carved off its significant slice – almost 70% is awarded to multinationals.

Such a level of foreign investor influence is extraordinary even by regional standards, although in Eastern Europe we are all rowing in the same boat, i.e. in what the literature calls a dependent market economy. That is, our economies are wholly dependent on Western investments. This is particularly true for the car manufacturing brought to Hungary, because it accounts for more than 20% of Hungarian exports, and this situation hasn’t changed since the year 2000. Meanwhile a leading Fidesz politician says that nothing can be done because “Hungary is a determined country, where it’s impossible to pursue other economic policies.” But it was precisely the Orbán regime which showed that it is. Over the last fifty years countries such as South Korea, Taiwan and Singapore went through economic development with substantial state assistance, which took them to where we are heading today. Big companies like Samsung, LG and Hyundai were heavily subsidized by the state, which in return set certain export expectations, so these companies were forced to continue spending on innovation. While it is a widespread view that the international rules made impossible this type of government intervention, we can see that the Orbán regime can support their oligarchs without any sanctions. The problem is that instead of innovation the regime expects only political loyalty. Despite its references to them as a model, none of the East Asian models’ components has been employed.

In light of the above it is not surprising that there have never been so many who wanted to emigrate from the country. Meanwhile the middle class is eroding and the differences in wealth between the richest and the poorest are increasing.

There is money available though, since up to now the government has spent HUF 300 billion on state companies and a further HUF 100 billion on its own (i.e. our) soccer pet. Overall, we spend four times more on this prime minister’s mania than on road maintenance, while the number of spectators is steadily declining. There are other outlays that went wrong too – the György Matolcsy-led National Bank has had HUF 250 billion pumped into dubious foundations or spent for the purchase of art objects. In addition, another HUF 850 million was sunk into the Felcsút narrow gauge railway, never to produce any return, and HUF 6.7 billion credit was extended to Andy Vajna for the purchase of TV2. Speaking of Andy Vajna, it is worth highlighting the greatest of all items, in regard to which the government didn’t do anything, namely the offshore [knights racket]. Moreover, Hungary is actually moving in this direction. Even in the face of the couple of years old study finding that the almost unfathomable amount of USD 247 billion of untaxed income has left the country in past decades. In the course of this offshore racket we have suffered the second largest losses in Europe.

WHAT FOLLOWS FROM ALL THIS?

Looking at the numbers the government could demonstrate quite serious achievements compared to 2010, primarily in the area of balancing the ​​budget and public debt. The GDP growth rate could have been included but for the fact that this growth was due mainly to the accelerated EU investments and not to a better performance of the domestic economy. In fact our productivity has been stagnant since 2008.

On the other hand, the social inequalities have increased dramatically during these seven years. It is unlikely that these short-term favorable macro-economic data can be sustained in the long term, mainly because the Hungarian society’s human capital indicators have significantly deteriorated as a result of the dramatic underfunding of the public subsystems (healthcare, education, social policy, public transport). That is, the economic growth is due to a great extent to the EU investment funds and the short-term budgetary balance to huge austerity measures. Both are unsustainable.

February 19, 2017
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Roderick Beck
Guest

I believe those public debt figures exclude the EXIM bank. If so, it is an understatement. That is also the view of Eurostat. EXIM bank is a liability of the Hungarian government.

Roderick Beck
Guest

A lot more should have been devoted to productivity growth, which is the cornerstone of rising living standards. Over this period it has only 3% cumulative. Also the reduction in social taxes has been offset by the sharp rise in minimum wage, which is unjustified given Hungary shaky performance.

vomart huli
Guest

Antisemitic.

Guest

Describing yourself perfectly, country bumpkin?

Guest

This is worth a more detailed look, but after just a glance I have to say:
A scathing report!

Just a few first remarks:
The central bank’s interest rate policy between 2001 and 2007 encouraged the population to borrow in foreign currency.
So this problem developed in O’s first rgime already – it wasn’t MSZP who started it!

Re taxes:
The low flat income tax is only good for the rich – everybody else is hurt by the extremely high VAT (Afa) on everything, even basics, food etc – the latest changes here don’t really count. So again:
In Hungary only the poor and the stupid pay taxes!

So all in all Hungary is not getting stronger but weaker!

PS and not too much OT:
Other countries in the Balkan have similr problems. Just read in the news that in the three years since Croatia joined the EU 200 000 people (5% of the population) emigrated -90% of them to Germany …

Observer
Guest

wolfi

Zsigmond Járai, earlier Fidesz minister and the MNB governor at the time, increased the HUF interest rates up to 13.5% (?). at one instance by 3%. This was an attempt of the in-oppostion-Fidesz to choke the Hungarian economy.

Yes, the VAT is the poor people’s tax, but who cares – the poor are worth nothing in Orbanistan, as top Fidesznik János.Lázár pronounced.

Yes, there are problems in other countries too, but Hungary produced not only worse figures, but is doing pretty badly in almost all sectors.

Guest

Observer, you’re right with your observations :).

I sense and see a growing despair around us in Hungary – everybody who sees a chance wants to leave, the others just continue, not thinking too much about their situation – they know they can’t change a thing …

Observer
Guest

People CAN CHANGE THINGS as they did re. the internet tax, refugee referendum, Olympic games. If more of them moved and at least went to vote once in four years. But they can also write or go clamoring to their local council or MP, voice their opinion in their environment, become a volunteer or an activist, donate, organize, etc. etc.

If they don’t use any these tools, but only keep moaning and explaining why not, they will be screwed all the time, just as they are being now.

wrfree
Guest

Re: ‘Yes, the VAT is the poor people’s tax, but who cares – the poor are worth nothing in Orbanistan, as top Fidesznik János.Lázár pronounced’

Interesting as it relates to ‘connections’ in the area of human interaction within a global and a nation’s own communities. It would appear Magyarorszag would perhaps have something to learn from the Frenchman Montaigne about the fact that is the interlinking of ‘I’s which make up a civilization and/or society.

The dismal economic circumstances would seem to indeed show a gaping disconnection between all the ‘I’s in Magyar society. Settled under the dire statistics is the unfortunate view that Magyars have apparently lost the ability to connect with their ‘own’ as with anyone else outside of themselves for that matter. It’s almost as if there is a too much of the toxic self-centered ‘I’ as opposed to Montaigne’s ‘I’ which is reflective of inhabiting a community and concerned about private integrity when freedoms are under assault through autocratic methods. At bottom the nation appears to be on ‘disconnect’…with the proverbial ‘other’ and within their inner lives themselves. A veritable human ball of confusion.

Observer
Guest

Wrfree,

What are u talking about? Montaigne, Burke, Jefferson ?
It’s pàlinka, soccer, kolbàsz töltès – the heights of Felcsut thinking (the thievery is dressed as policy).

Magyar ugar! See ambalint 11.29 below.

The merriest barrack during the Kàdàr era turned into the saddest under in the Orban one.

Melanie Zuben
Guest

Wrfree & Observer,
“It’s pàlinka, soccer, kolbàsz töltès”

How about Friedmanite pure capitalism, the one that needs “bitter medicine” to cure the distortions you have so kindly brought to our attentions. Just to add more to the confusion.

Observer
Guest

Roderick Beck

Yes. There are other factors too, but this was only an article, not the whole study.

Yes. Not only the EximBank, but, say, the local governments have suffered a drastic reduction of funds, various estimates from HUF 300 to 440 billion/year. The reduction is much larger than the savings they realized from the state takeover of several main functions.

Yes, stagnating productivity is a problem, and so are the indirect, future impacts of the deteriorating education and health conditions, the low entrepreneurial inclination, societal lack of co-operation, the respect for the rule of law, etc. etc.

wrfree
Guest

Thank you Observer for the incisive data. Depressing.
After what I remember of my past visits I thought really better days would be ahead for the nation. Sure hasn’t materialized. What is it? Character? Bad luck? Miserableness affecting outlook on life?

In essence your data indicates a debilitating theme of ‘inaction’ tied in with convoluted and faulty decision-making and execution. Magyarorszag looks on a Roman road of decline. Looks as if a ‘laziness’ has set in. In one sense the tribulations in the economy shout out clues to where the problems are. It’s scientific.

Doesn’t look as if the country has the strength to get out of the hole. And there’s the rub. No wonder they seem to love ‘strongmen’. Problem is they go to the wrong guys as well. They’re just as weak except they brag their way in faking ‘prosperity’ as they draw the country’s laced curtains. Time to get out pins and explode the ridiculous bubble wrap they inflate and surround themselves up with. Could be a start…..

wrfree
Guest

And something regarding the stewardship of the nation in the past few years. A comment from the past by one who saw and understood ‘decline’…

‘A shocking crime was committed on the unscrupulous initiative of few individuals, with the blessing of more, and amid the passive acquiescence of all. Tacitus

Observer
Guest

Love the Tacitus quote.

The Hungarians have a penchant for suicide, worse than shooting themselves in the foot – a penchant for self destruction. It is a result of the national psyche, but they, typically, blame God for striking the magyar.

petofi
Guest

@ Observer

No, they blame the Jews.

Observer
Guest

The Jews, of course. Every fascist knows this.
But when there are no Jews around it’s Isten veri a Magyart. Oh yes, these will blame even God, it’s never their own fault.

pappp
Guest
No voter cares about such abstract statistics especially when those numbers are cooked. And they are. Gazdaságkutató is not in a position to be able to really criticize the numbers so the think tank just automatically assumes that the numbers are correct because, you know, they are published by an EU government so they must be the truth. Right. Given the cognitive limitations of average voters what really counts – among other factors – in terms of economics is the last six months before the elections and people’s expectations about the future. If people are happy because they received pension increases and salary increases in hospitals etc. and they expect this to continue they will vote for the devil they know. On the other hand the US elections showed very clearly that despite respectable statistics on paper people in certain states (WI, MI, OH, PA, FL etc.) were rather unhappy. They were none to happy about the creation of thousands of new burger flipping jobs which look great on paper but less so in reality. Hungary is certainly not like CA or NY, but more like I dunno rural Wisconsin. There is a myth that Hungarian companies can’t find employees… Read more »
Observer
Guest

pappp

The info here is not for Dombvár average voters, not even primarily for the Hungarians at home.
Cognitive limitations acknowledged I can make it more simple and more graphic with two banknotes:

FROM EVERY TEN THOUSAND SPENT YOU COULD GET FIVE HUNDRED BACK, if the Orban mafia didn’t steal so much in 2014-15.

Observer
Guest

“..those numbers are cooked…”

This is a bit like the “the system is rigged, folks” or the like the újpesti pub talk. We know that the KSZH numbers are cooked as far as possible.
The others may not be quite right, but we compare, there is economics knowledge and then things stack up, e.g.:

– many international bodies show similar trends re H (contrary to what is officially claimed in H)
– there’s hardly any country with such a primary/secondary education and investment level with less than 5% unemployment (as in H)
– new jobs cannot be created without investment (as in H),
– deficits cannot be reduced without austerity and/or growth (as in H),
– broad range/significant investments come when there’s secure environment (not in H). etc etc.

One may believe whatever, but I don’t recognize rumors, beliefs or religions, where evidence based professional reasoning can be applied with a great degree of success.

pappp
Guest

Hungary’s situation is actually much worse than what it looks from these numbers, that’s what I wanted to say.

bimbi
Guest
Two points in the Summing Up: 1) “…productivity has been stagnant since 2008” and 2) “…social inequalities have increased dramatically…”. 1) Despite the staggering amount of money coming into the country via the EU ‘cohesion funds’, the Orban/Varga/Matolcsy/Fidesz government has no idea (and one suspects no interest) in running a national economy. Yes, they can lie up a storm about balancing the books for 30 Dec. they can plaster their bill-boards with their feel-good messages but the result is always the same – the economy in Hungary remains a disaster area as it has for the last seven years. And if you doubt this – ask the 4 million in poverty how THEIR lives have improved over the last SEVEN years. 2) The increase in social inequality is easy to explain. The 4 million poorest haven’t gotten any poorer but the rich have gotten plenty richer. The industrial-scale theft, “legalized” by the government (start with the € 10 billion pension money theft), the single bidding, the insider trading (Quaestor), the nepotism, the selling of “residencies” for personal profit, the lighting scams, the harbors, the ‘luxury hotels’, the new farmers and so on sure have created Orban’s personal little middle class,… Read more »
bimbi
Guest
Two points in the Summing Up: 1) “…productivity has been stagnant since 2008” and 2) “…social inequalities have increased dramatically…”. 1) Despite the staggering amount of money coming into the country via the EU ‘cohesion funds’, the Orban/Varga/Matolcsy/Fidesz government has no idea (and one suspects no interest) in running a national economy. Yes, they can lie up a storm about balancing the books for 30 Dec. they can plaster their bill-boards with their feel-good messages but the result is always the same – the economy in Hungary remains a disaster area as it has for the last seven years. And if you doubt this – ask the 4 million in poverty how THEIR lives have improved over the last SEVEN years. 2) The increase in social inequality is easy to explain. The 4 million poorest haven’t gotten any poorer but the rich have gotten plenty richer. The industrial-scale theft, “legalized” by the government (start with the € 10 billion pension money theft), the single bidding, the insider trading (Quaestor), the nepotism, the selling of “residencies” for personal profit, the lighting scams, the harbors, the ‘luxury hotels’, the new farmers and so on sure have created Orban’s personal little middle class,… Read more »
Observer
Guest

bimbi

It’s even more sickening considering that in this period Hungary drew FOUR TIMES the Marshal plan aid, which at the time helped rebuilt war damaged western Europe. What did Orban built here?
Hungary, and Europe, benefited from another huge value transfer in the last several years – the low energy/oil/gas prices. This added 2% GDP to the balance. How did this improve life here?

The Orban regime squandered the greatest historical opportunity to reform and boost the economy, to lay the grounds for knowledge based development and in turn to outgrow the national debt.
Instead H dropped behind in almost every respect.

Think lampposts as Z.Bayer used to say.

Ferenc
Guest

Devastating analyses of the Orban government, including some grafical presentation of numbers would make their ‘performance’ even more clear.
Since some months I have made grafics by using (free) infograms (saw them first at index), all comparing the V4 countries (and sometimes even including Romania) using publically available data, here you can find them all (in order of the article):

Human Development Index (1990-2014, UNDP): https://infogr.am/dfeeb1b0-f63d-453f-b8d0-c30d17049bb8

GDP per capita (per person)
in USD (2007-15, OECD): https://infogr.am/82240856-94ec-44f9-b5e1-9786e1ba5425
in USD (2007-15, WEF): https://infogr.am/5e2ea3b7-670f-4343-ab8d-eb13a8282378
in EURO (2004-13, Eurostat): https://infogr.am/v4___gdp_per_capita_eurostat_2004_13

Healthcare System Performance
Euro Health Consumer Index (2008-16): https://infogr.am/f0dfa410-d4c6-4544-afd4-72b91f664f13

Corruption Perception Index (2006-16): https://infogr.am/41c7709f-1204-47be-884b-3b9579f3dd40

additional
Global Competitiveness Index (2006-16, WEF): https://infogr.am/01692b07-fbae-46a6-9c99-b858efad7ddd

I started to make those, because I wanted to see for myself the status of Hungary compared to neighbouring countries, i.e.doubts came creeping in about the correctness of the news spread by the OV government

Feel free to use any of the above infograms.

Ferenc
Guest

additional personal note:
Except raising prices, nothing has changed in the way of ticketing/pricing the usage of the public transport system in Budapest since 1995 (when I first visited, and don’t know for other cities).
Still no charging per travel distance and/or time, i.e.one busstop still costs same as a trip over a complete bus/trolley/metro-line. Remember from my last visit to Prague in 2010, that there already was updated this old system (though don’t remember how exactly).

Ferenc
Guest

Would it be a good idea to ‘counter’ the OV/Fidesz propaganda “Magyarország Erősödik”?
Putting together a similar leaflet using (objective) data about the items pushed by OV/Fidesz (and minister Rogan). In an appendix could be more items like those used in the posted article.
I know it’s like copying OV/F/A, but if done in a good way and using good data/sources, it could create doubts in OV/Fidesz supporters minds.

You can flip through (only of you want) the OV/F/A leaflet here: http://2017.kormany.hu/

PS: most ‘funny/crazy’ item from the leaflet is for me “Redudcing the VAT for the MOST important foods – milk, eggs and poultry”. note: only for those!!!!

Ferenc
Guest
Observer
Guest

Tnx for the nice little charts – very easy to see the decline/decay under the Orban gang.

Leaflet : I have mentioned this and similar ideas to two democratic parties’ guys, but ….. I absolutely agree with your view here.

The larger dem parties definitely need more creativity. It’s amazing how some people seem to have missed the net as a learning tool, at least.

Ferenc
Guest

as a slogan on that leaflet could be something like:

“OUR alternative data, NOT fake, but REAL”

Observer
Guest

Free coins

To paraphrase a trumping gem of wisdom : the facts are real, the figures are fake.

But then Kellyann C. may have “alternative facts”.
Analyze this!

Observer
Guest

Ferenc

Note that the VAT was reduced for the primary products like milk, not for the processed ones like cheese, butter,yogurt, which form the bulk of the sales.

Of course there was the inevitable lying: e.g. B.Rétvári announced that families will save up to 30 – 35 000 Ft. a month on this reduction. Doesn’t take an astronomer to calculate that this family must spend almost an average net earning, i.e. 140-150 000 Ft. a month on milk to save that much.
Beads for idiots.

Ferenc
Guest

Well to reach that amount of saving, or you’ll get milk poisoning or have an enormous family (>100 or so)

Guest

The Hungarian VAT concept is really idiotic – putting a high VAT/Afa on basic things and punishing the poor people!

In Germany we have 7% VAT on basic stuff like food – or books …

And now selectively reducing VAT for some products is sheer madness – but that’s the Fidesz way:

A new law every day keeps sanity away!

It’s all so crazy -you couldn’t invent this!

petofi
Guest

“…selectively reducing VAT..”

Ah, the great largesse of the Fidesz government! Like feeding pidgeons on the square…

Observer
Guest

wolfi

Crazy it is in fact: according to a lawyer, on August 31 last year four volumes of State Gazette (Àllami Közlöny) were published containing thousands of pages of legislation. Some of the acts were to be applicable in less than 48 hours thereafter.
This was not only Hungarian, but a world record in constitutional lawlessness.

petofi
Guest

Reminds me of the ‘shopping channel’ come-ons: “I saved $500 this month!” says the excited lady in the commercial. Of course, the fact is that she had to spend $5,000 to get that ‘saving’…

Guest

The post sums up the decline. Now we are waiting for the fall.

Member

“In 2010 the PD was HUF 20,420 billion or 78.8% of GDP. Seven years later, in 2016 it was 25,393 billion or 75.5% of GDP.”

This number seems to be a mistake or manipulation.

The article here gets its data from vg.hu (this news source is also owned by the Orban regime now), which clearly states that this number is the GROSS “consolidated” debt.

This number contradicts the the official MNB number, which is 25922.4 as of 2016-12-31.

There are numerous “public debt” numbers (as of 2016-12-31)

gross “consolidated” debt [MNB]: 25922.4
gross “Maastricht” debt [AKK]: 25922.37

gross, “non-consolidated liabilities”: [MNB]: 34248.2

gross debt, central gov’t only [AKK]: 25430.05
gross liabilities, central gov’t only [MNB]: 34415.3

Numbers can also change retroactively. I saved some data
from before Matolcsy’s takeover 4 years ago.
Gross numbers are easier to manipulate in any case.

net debt [MNB]: 22939.7
net debt, central government only [MNB]: 24832.7

Istvan
Guest

An extraordinarily intelligent discussion on the blog about the limits of economic data reflecting life in Hungary, or for that matter anywhere on earth. Here in the USA the Economic Policy Institute (EPI), which is decidedly liberal, has for years been looking at the impact of the economy on the poor and working classes. Their data was predictive of the rise of Trump, although I think EPI assumed the economic realities they portrayed would portend moves towards something akin to an American social democratic State.

Thanks for all of your thoughtful commentary.

Observer
Guest

Sorry for butting in everywhere, but “it’s the economy, stupid”, so ..

I haven’t seen the EPI studies, but Pickety, Buffet and others have been sounding the alarms on the points of dangerous inequalities, loss of dynamism, governments growing complacent or just surviving terms, etc. for years.
As one of the TED speakers put it – beware, the pitchforks are coming.

Guest

Pre-war Hungary used to be known as a country of three million beggars (a három millió koldus országa).

Looks like eighty years later nothing much has changed on Ady’s magyar ugar (magyar ugar = the Hungarian wastes; Ady having been a renowned early 20th century modernist poet who wrote a great deal about that).

And yet next door, a mere two hundred clicks from Budapest, there is an economically shining Austria in the absolute vanguard of European economic development.

Looks like the over quarter of a century since the regime change was entirely insufficient for the Hungarians to make the slightest progress toward catching up with their next door neighbor.

Same old same old. A bunch of deadbeats.

Tyrker
Guest

An interesting factoid: that “three million beggars” line is nowadays attributed to Endre Ady, although it was actually coined in 1928, 9 years after the poet’s passing. It was the title of a book written by a sociologist-cum-right-wing-extremist called György Oláh: https://moly.hu/konyvek/olah-gyorgy-harom-millio-koldus

Guest

Yes, and of course I knew that. Ady coined the “magyar ugar” trope around the turn of the century, while the trope of “three million beggars” was coined, as you correctly point out, by György Oláh in 1928.

Guest

I may be badly biased on this score, but I think that if Hungary had ten million Jews living there, it would by now – over a quarter of a century after the regime change – be well on its way to race past Austria on the European economic league tables.

The mess that the thoroughly inept and profoundly corrupt Hungarian elites on both the left and right of the political spectrum have managed to make of their economy and society over this past quarter of a century simply boggles the mind.

Guest

What strikes me as the most disastrous of all in the Hungarian situation is the parlous state of education at all levels combined with the heavy fetters on the spirit of enterprise, innovation and risk-taking. Instead, Hungary has become a paradise for rent-seekers. Wow! Talk about shooting yourself in the foot!

petofi
Guest

Hungary is a slave state in the making–the great discovery of the Pavlovian, cellar dwellers
for the near-far.

It seems that the way to demoralize and totally dominate a society is to take away the freely indormed press and tv. It’s worked in Russia, Hungary, and, surprisingly (since no one seems to have commented on this from America) it’s in process in the US. Watching the talking heads at MSNBC, not a one has been able to make sense of Trump’s attacks on the press and tv. The insularity of American talking-heads is shocking.

petofi
Guest

correction: “for” should be “from”

petofi
Guest

@ ambalint

About the jews…yes, they’re proactive and developmental. But lest you forget, the jews of Budapest were not (as my father used to say) ‘made with a finger’–they allied themselves with people in power. So, behind the scenes, I have no doubt that some jews exist in the Fidesz power structure. As they were also positioned in MSZP governments, too.

Guest

P, with respect, that wasn’t the point that I was making. If there were ten million Jews in Hungary and no one else, then they would be “the power structure.”

As to any self-declared Jews (or labeled as Jews) living in Hungary today, they are an exposed, vulnerable and defenseless minority at the mercy of the powers that be, whether they be Fidesz, MSZP or any other, so it is entirely unsurprising that they or their communal representatives co-operate and collaborate with whoever is in power, and where possible embed themselves in whatever the current power structure may be. That has also been the historical pattern for Hungarian Jewry ever since their political emancipation in 1867. Anyway, the remnant Jews in Hungary are loyal Hungarians first and last, thus it should not be occasion for surprise that they do as everyone else does there.

Ferenc
Guest

Apart lagging far behind Autria, Hungaria is even lagging behind Czech, Slovakia and Poland, while 27 years ago at the top of that group.
And imagine at the moment even Romania is closing the gap to Hungary!!

Guest

Ultimately it is the mentality of the people of a country that drives on the one hand the kind of government and governance they have and on the other hand the attitudes toward ethics, education, enterprise, innovation and risk-taking. Hungary is a profoundly troubled country and society in respect of each and every one of these matters, both historically and currently. When one looks at the utter corruption and amorality of the Hungarian right, the ivory tower unreality, confusions and utter disarray of the Hungarian left, and the blockheaded ignorance and self-defeating prejudices of the overwhelming majority of the Hungarian electorate, one cannot but loose all hope for that benighted country.

Guest

And how sadly ironic that Hungary, which was in the vanguard of rapid economic development in Eastern Europe a hundred years ago (thanks to its Jews and ethnic Germans), and was an emphatically multilingual country, where the vast majority of people were either bilingual or trilingual, is today among the pathetic laggards of economic development in Eastern Europe, and has been reduced to a miserable, insular and self-defeating monolingualism on the part of most people who live there.

Guest

And talking about languages . . . If after the 1867 Compromise the Hungarian leadership would have proceeded to establish a Swiss-style Danubian confederation (the Kossuth suggestion), where each language spoken in the Kingdom of Hungary would have enjoyed absolutely equal rights, each ethnic concentration allocated its own self-governing canton or cantonss, and there would have been equal rights and half a century of prosperity for all, it is most unlikely that there would have been a Trianon. Yeah, and if my grandmother had wheels . . . Unhistorical musings . . .

Guest

Yes, one thing is for sure: Hungarians can always be unconditionally trusted to make the most disastrous possible strategic choices.

Guest

I’ve said it before and others too:

Maybe Hungary’s biggest problem is that everybody who sees a chance is leaving for good – not only the seasonal workers who go to harvest vegetables somewhere in the West, the bigger problem is the brain drain!

A crazy idea of mine:

maybe people remember the stories of all those Jews who had to leave before WW2 and made it big in the USA etc – so they want to do something similar!

Scientists, doctors, nurses, IT people, engineers, even “regular workers”( like our hair stylist) who are good see that outside Hungary they are well accepted and make at least four times the money!

Member

Analysis of the employment situation in Hungary, calculated from two series of statistical data; the second one was published today, on 2017-02-20.

Three-month average, October – December 2016:

employed by enterprises : 1979.8 thousand
“self employed”: 1214.3
The sum of these two numbers include 115.7 thousand people, or 3.63% who actually worked abroad.

employed by the state: 689.4
employed by non-profit organizations: 109.2
“fostered” [köz] workers: 200.1 (1st series) or 217.7 (2nd series)

Member

Total population between 15 and 64:
2016 Oct-Dec average: 6461.7
2010 Oct-Dec average: 6729.4,

a decline of 267.7 thousand, or 3.98%.

Guest

Off-topic, and you probably already discussed this, but Kovács Gergely’s interview on EchoTV is a masterpiece:

https://youtu.be/ye_O12JnSf0?t=414

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