Austria vs. Hungary
Economy
Austria | Hungary | |
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Economy - overview | Austria is a well-developed market economy with skilled labor force and high standard of living. It is closely tied to other EU economies, especially Germany's, but also the US', its third-largest trade partner. Its economy features a large service sector, a sound industrial sector, and a small, but highly developed agricultural sector. Austrian economic growth strengthen in 2017, with a 2.9% increase in GDP. Austrian exports, accounting for around 60% of the GDP, were up 8.2% in 2017. Austria's unemployment rate fell by 0.3% to 5.5%, which is low by European standards, but still at its second highest rate since the end of World War II, driven by an increased number of refugees and EU migrants entering the labor market. Austria's fiscal position compares favorably with other euro-zone countries. The budget deficit stood at a low 0.7% of GDP in 2017 and public debt declined again to 78.4% of GDP in 2017, after reaching a post-war high 84.6% in 2015. The Austrian government has announced it plans to balance the fiscal budget in 2019. Several external risks, such as Austrian banks' exposure to Central and Eastern Europe, the refugee crisis, and continued unrest in Russia/Ukraine, eased in 2017, but are still a factor for the Austrian economy. Exposure to the Russian banking sector and a deep energy relationship with Russia present additional risks. Austria elected a new pro-business government in October 2017 that campaigned on promises to reduce bureaucracy, improve public sector efficiency, reduce labor market protections, and provide positive investment incentives. | Hungary has transitioned from a centrally planned to a market-driven economy with a per capita income approximately two thirds of the EU-28 average; however, in recent years the government has become more involved in managing the economy. Budapest has implemented unorthodox economic policies to boost household consumption and has relied on EU-funded development projects to generate growth.
Following the fall of communism in 1990, Hungary experienced a drop-off in exports and financial assistance from the former Soviet Union. Hungary embarked on a series of economic reforms, including privatization of state-owned enterprises and reduction of social spending programs, to shift from a centrally planned to a market-driven economy, and to reorient its economy towards trade with the West. These efforts helped to spur growth, attract investment, and reduce Hungary's debt burden and fiscal deficits. Despite these reforms, living conditions for the average Hungarian initially deteriorated as inflation increased and unemployment reached double digits. Conditions slowly improved over the 1990s as the reforms came to fruition and export growth accelerated. Economic policies instituted during that decade helped position Hungary to join the European Union in 2004. Hungary has not yet joined the euro-zone. Hungary suffered a historic economic contraction as a result of the global economic slowdown in 2008-09 as export demand and domestic consumption dropped, prompting it to take an IMF-EU financial assistance package.
Since 2010, the government has backpedaled on many economic reforms and taken a more populist approach towards economic management. The government has favored national industries and government-linked businesses through legislation, regulation, and public procurements. In 2011 and 2014, Hungary nationalized private pension funds, which squeezed financial service providers out of the system, but also helped Hungary curb its public debt and lower its budget deficit to below 3% of GDP, as subsequent pension contributions have been channeled into the state-managed pension fund. Hungary's public debt (at 74.5% of GDP) is still high compared to EU peers in Central Europe. Real GDP growth has been robust in the past few years due to increased EU funding, higher EU demand for Hungarian exports, and a rebound in domestic household consumption. To further boost household consumption ahead of the 2018 election, the government embarked on a six-year phased increase to minimum wages and public sector salaries, decreased taxes on foodstuffs and services, cut the personal income tax from 16% to 15%, and implemented a uniform 9% business tax for small and medium-sized enterprises and large companies. Real GDP growth slowed in 2016 due to a cyclical decrease in EU funding, but increased to 3.8% in 2017 as the government pre-financed EU funded projects ahead of the 2018 election.
Systemic economic challenges include pervasive corruption, labor shortages driven by demographic declines and migration, widespread poverty in rural areas, vulnerabilities to changes in demand for exports, and a heavy reliance on Russian energy imports. |
GDP (purchasing power parity) | $498.78 billion (2019 est.) $491.803 billion (2018 est.) $479.433 billion (2017 est.) note: data are in 2010 dollars | $321.869 billion (2019 est.) $307.778 billion (2018 est.) $291.995 billion (2017 est.) note: data are in 2010 dollars |
GDP - real growth rate | 1.42% (2019 est.) 2.58% (2018 est.) 2.4% (2017 est.) | 4.58% (2019 est.) 5.44% (2018 est.) 4.45% (2017 est.) |
GDP - per capita (PPP) | $56,188 (2019 est.) $55,631 (2018 est.) $54,496 (2017 est.) note: data are in 2010 dollars | $32,945 (2019 est.) $31,485 (2018 est.) $29,832 (2017 est.) note: data are in 2010 dollars |
GDP - composition by sector | agriculture: 1.3% (2017 est.) industry: 28.4% (2017 est.) services: 70.3% (2017 est.) | agriculture: 3.9% (2017 est.) industry: 31.3% (2017 est.) services: 64.8% (2017 est.) |
Population below poverty line | 13.3% (2018 est.) | 12.3% (2018 est.) |
Household income or consumption by percentage share | lowest 10%: 2.8% highest 10%: 23.5% (2012 est.) | lowest 10%: 3.3% highest 10%: 22.4% (2015) |
Inflation rate (consumer prices) | 1.5% (2019 est.) 2% (2018 est.) 2% (2017 est.) | 3.3% (2019 est.) 2.8% (2018 est.) 2.3% (2017 est.) |
Labor force | 3.739 million (2020 est.) | 4.414 million (2020 est.) |
Labor force - by occupation | agriculture: 0.7% industry: 25.2% services: 74.1% (2017 est.) | agriculture: 4.9% industry: 30.3% services: 64.5% (2015 est.) |
Unemployment rate | 7.35% (2019 est.) 7.7% (2018 est.) | 3.45% (2019 est.) 3.71% (2018 est.) |
Distribution of family income - Gini index | 29.7 (2017 est.) 30.5 (2014) | 30.6 (2017 est.) 28.6 (2014) |
Budget | revenues: 201.7 billion (2017 est.) expenditures: 204.6 billion (2017 est.) | revenues: 61.98 billion (2017 est.) expenditures: 64.7 billion (2017 est.) |
Industries | construction, machinery, vehicles and parts, food, metals, chemicals, lumber and paper, electronics, tourism | mining, metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), motor vehicles |
Industrial production growth rate | 6.5% (2017 est.) | 7.4% (2017 est.) |
Agriculture - products | milk, maize, sugar beet, wheat, barley, potatoes, pork, triticale, grapes, apples | maize, wheat, milk, sunflower seed, barley, rapeseed, sugar beet, apples, pork, grapes |
Exports | $270.888 billion (2019 est.) $263.145 billion (2018 est.) $249.312 billion (2017 est.) | $167.99 billion (2019 est.) $158.802 billion (2018 est.) $151.185 billion (2017 est.) |
Exports - commodities | cars, packaged medical supplies, vehicle parts, medical vaccines/cultures, flavored water (2019) | cars and vehicle parts, packaged medicines, spark-ignition engines, video displays, broadcasting equipment (2019) |
Exports - partners | Germany 28%, United States 7%, Italy 6%, Switzerland 5% (2019) | Germany 27%, Romania 5%, Italy 5%, Slovakia 5% (2019) |
Imports | $253.276 billion (2019 est.) $247.225 billion (2018 est.) $235.385 billion (2017 est.) | $159.63 billion (2019 est.) $148.471 billion (2018 est.) $138.773 billion (2017 est.) |
Imports - commodities | cars, vehicle parts, broadcasting equipment, refined petroleum, packaged medical supplies (2019) | cars and vehicle parts, integrated circuits, packaged medicines, broadcasting equipment, crude petroleum (2019) |
Imports - partners | Germany 39%, Italy 7%, Czechia 5% (2019) | Germany 25%, China 6%, Poland 6%, Austria 6%, Czechia 5%, Slovakia 5%, Italy 5%, Netherlands 5% (2019) |
Debt - external | $688.434 billion (2019 est.) $686.196 billion (2018 est.) | $123.256 billion (2019 est.) $125.29 billion (2018 est.) |
Exchange rates | euros (EUR) per US dollar - 0.82771 (2020 est.) 0.90338 (2019 est.) 0.87789 (2018 est.) 0.885 (2014 est.) 0.7634 (2013 est.) | forints (HUF) per US dollar - 295.3276 (2020 est.) 299.4939 (2019 est.) 283.5923 (2018 est.) 279.33 (2014 est.) 232.6 (2013 est.) |
Fiscal year | calendar year | calendar year |
Public debt | 78.6% of GDP (2017 est.) 83.6% of GDP (2016 est.) note: this is general government gross debt, defined in the Maastricht Treaty as consolidated general government gross debt at nominal value, outstanding at the end of the year; it covers the following categories of government liabilities (as defined in ESA95): currency and deposits (AF.2), securities other than shares excluding financial derivatives (AF.3, excluding AF.34), and loans (AF.4); the general government sector comprises the sub-sectors of central government, state government, local government and social security funds; as a percentage of GDP, the GDP used as a denominator is the gross domestic product in current year prices | 73.6% of GDP (2017 est.) 76% of GDP (2016 est.) note: general government gross debt is defined in the Maastricht Treaty as consolidated general government gross debt at nominal value, outstanding at the end of the year in the following categories of government liabilities: currency and deposits, securities other than shares excluding financial derivatives, and national, state, and local government and social security funds. |
Reserves of foreign exchange and gold | $21.57 billion (31 December 2017 est.) $23.36 billion (31 December 2016 est.) | $28 billion (31 December 2017 est.) $25.82 billion (31 December 2016 est.) |
Current Account Balance | $12.667 billion (2019 est.) $5.989 billion (2018 est.) | -$392 million (2019 est.) $510 million (2018 est.) |
GDP (official exchange rate) | $445.025 billion (2019 est.) | $163.251 billion (2019 est.) |
Credit ratings | Fitch rating: AA+ (2015) Moody's rating: Aa1 (2016) Standard & Poors rating: AA+ (2012) | Fitch rating: BBB (2019) Moody's rating: Baa3 (2016) Standard & Poors rating: BBB (2019) |
Ease of Doing Business Index scores | Overall score: 78.7 (2020) Starting a Business score: 83.2 (2020) Trading score: 100 (2020) Enforcement score: 75.5 (2020) | Overall score: 73.4 (2020) Starting a Business score: 88.2 (2020) Trading score: 100 (2020) Enforcement score: 71 (2020) |
Taxes and other revenues | 48.3% (of GDP) (2017 est.) | 44.5% (of GDP) (2017 est.) |
Budget surplus (+) or deficit (-) | -0.7% (of GDP) (2017 est.) | -2% (of GDP) (2017 est.) note: Hungary has been under the EU Excessive Deficit Procedure since it joined the EU in 2004; in March 2012, the EU elevated its Excessive Deficit Procedure against Hungary and proposed freezing 30% of the country's Cohesion Funds because 2011 deficit reductions were not achieved in a sustainable manner; in June 2012, the EU lifted the freeze, recognizing that steps had been taken to reduce the deficit; the Hungarian deficit increased above 3% both in 2013 and in 2014 due to sluggish growth and the government's fiscal tightening |
Unemployment, youth ages 15-24 | total: 8.5% male: 9.2% female: 7.8% (2019 est.) | total: 11.4% male: 11.9% female: 10.6% (2019 est.) |
GDP - composition, by end use | household consumption: 52.1% (2017 est.) government consumption: 19.5% (2017 est.) investment in fixed capital: 23.5% (2017 est.) investment in inventories: 1.6% (2017 est.) exports of goods and services: 54.2% (2017 est.) imports of goods and services: -50.7% (2017 est.) | household consumption: 49.6% (2017 est.) government consumption: 20% (2017 est.) investment in fixed capital: 21.6% (2017 est.) investment in inventories: 1% (2017 est.) exports of goods and services: 90.2% (2017 est.) imports of goods and services: -82.4% (2017 est.) |
Gross national saving | 28.5% of GDP (2019 est.) 26.9% of GDP (2018 est.) 26.3% of GDP (2017 est.) | 27.8% of GDP (2019 est.) 26.9% of GDP (2018 est.) 24.8% of GDP (2017 est.) |
Source: CIA Factbook