Including purchasing power, Romania’s GDP per capita may surpass ours. However, the other data still indicate a Hungarian advantage. One thing is for sure: during the illiberal Orbán cabinet, the Bucharest, which is following the liberal, Euro-Atlantic trend, has lagged behind Hungary and is lagging behind Hungary in terms of development. But you can rearrange the trends at any time.
A strange, sometimes tragic number war broke out in the Romanian, Hungarian and Transylvanian Hungarian press these days. The debate is that a local World Bank expert is said to be talking about the fact that Romania’s GDP per capita has exceeded (or may exceed) a similar Hungarian indicator for the first time.
It has since emerged that the original news, which had already treated “Romanian overtaking” as a completed fact, had been repeatedly received and translated by the press in both countries. According to the information of the 24th World Bank, the expert in question is primarily concerned with urban development, not macroeconomics. is over Marcel Ionescu-Heroiu his words may have been misunderstood.
In Romania, which is currently in a state of government crisis, the National Liberal Party (PNL), for example, has led the cabinet as the leading force so far.
Meanwhile, Hotnews.ro he spoke the Romanian expert, who clarified and said that Romania’s GDP per capita, calculated on the basis of purchasing power parity, could precede similar indicators in Hungary. But even this cannot be stated with absolute certainty at this moment.
The Romanian also presented two figures and graphs comparing GDP per capita between the two countries on the basis of purchasing power parity (ie a calculation taking into account the price level of the given country and the purchasing power of local money). (According to Wikipedia, purchasing power parity it measures, “how many products and services can be bought in one currency compared to another, taking into account the different prices in different countries”).
In terms of purchasing power parity, the differences between Hungary and Romania have been declining since. Last quoted by Hotnews data it is $ 800 per capita. You may not be able to work this out in a year. (Previously, there was an example of such catching up during the reign of Ferenc Gyurcsány.) According to the portal, the distance between the two countries has generally decreased in recent years, but increased in 2018, for example.
However, it is true that Romania is showing one of the most dynamic developments in Europe since the turn of the millennium.
In 2000, Romania’s GDP per capita was still 26 percent of the EU average, but in 2020 it is already at 72 percent, which is an amazing jump. All this corresponds to the availability of the World Bank data, they run until 2019.
Economists do not usually compare countries on a strong parity, as the 24th has not done before, but simply look at development on a GDP / capita basis, because the mixing of different price systems can cause significant disruption. Based on this, however, Hungary still has an advantage corpse, although we see a declining trend here as well. At present, a Hungarian produces more than three Romanian dollars for three thousand dollars.
According to statistics, Hungary’s leading per capita national income in purchasing power parity (GNI, constant price, in 2017 dollars) is ahead of Romania, also according to the World Bank. according to.
Incidentally, the world ranks countries primarily on the basis of GNI and specific GNI, and in this Hungary is better, ie the national capital is stronger than in Romania. A number of methodological observations can therefore be made about Ionescu-Heroiu’s calculations, in most indicators we are still ahead of Romania, but the trend is deteriorating from a Hungarian point of view.
Another question is whether this trend will continue after the viral crisis, namely that the Orbán government, following the illiberal, Russian-Chinese orientation, has set the liberal economic policy of the Romanians behind Hungary on a slower growth path, catching up with Euro-Atlantic commitment. (The difference is shown by the fact that the Romanians have been discussing the introduction of American nuclear power plant technology, for example, while Hungary is cooperating with Russia in this field.)
However, it is highly questionable whether, in the midst of the coronavirus epidemic that is raging in Romania and the multifactorial crisis affecting the European car industry, we are able to overtake our neighbor. This is because the current viral crisis and the resulting unique economic effects, as well as certain technological and Covid-independent demographic trends, can confuse trends to such an extent that it would be difficult to say with certainty about the long-term prospects of the two economies at this time.
Thus, for example, we have only fragmentary information about the ten months that have passed so far in 2021. Within this period, for example, Hungary’s growth in the second quarter was more dynamic than Romania’s. Hungarian GDP grew by 17.8 between April and June According to KSH, while Romanian statistics show an increase of around 13-14 percent in Romanian statistics, calculated using several methods. Based on.
The July-September period, ie the third quarter, is over, and they are certainly not there yet, but it is already suspected that the Hungarian economy has performed worse here. So the trend is not visible at all this year.
As we already know, just on Thursday, the Hungarian Ministry of Finance changed the rate of economic growth expected for the whole year downwards. They are now expected to fall below seven percent Mihály Varga as opposed to estimates of GDP growth of 7-7.5 per cent.
All this may be related to what we pointed out a few days ago: the Hungarian car industry is heavily dependent on German and European car production, namely Volkswagen (Audi in Győr), Daimler (Mercedes in Kecskemét) and Stellantis (Opel in Szentgotthárd). they have serious supply problems, which obviously affects the Hungarian subsidiaries as well. The latter are the key players in the Hungarian manufacturing and export industry.
We also wrote that Hungarian industrial growth slowed drastically within a year, reaching only 2.6 percent in August and almost 60 percent in the spring. This is in line with the already mentioned effect, the factories were less or less operational until the full closure in 2020, so it was easy to expand to the low base function this spring, but in the autumn due to supply chain disruption, .
Another issue is the health effects of coronavirus. This is the most tragic component of the current processes. all countries are facing serious problems. The situation is now tragic in Romania as well, after the relatively low number of people vaccinated in our south-eastern neighbor, like in most Orthodox Christian countries. In any case, according to world statistics, Hungary is the sixth (per capita in the death toll on 31 November) and Romania was the 11th largest in terms of deaths per capita. Wordometers according to.
It is difficult to decide whether the virus crisis will have a more negative impact on Hungary or Romania this year. Here, too, mortality is high and the impact on the economy cannot be determined yet.
The very poor performance of Romanian health care is not surprising, as explained by a macroeconomic data: Ireland and Romania have the lowest tax-to-GDP ratios in the EU, according to Maszol.ro. rate. It is less than 21 per cent for the Irish, 27 per cent for the European average and 41 per cent for Europe.
On the one hand, low public burdens are good for economic growth: Romania has indeed shown strong GDP growth in recent decades, but then much less money is being spent on health care in crisis. This is the setback of their liberal economic policies.
In addition to economic processes, long-term trends are strongly influenced by demographic trends. The decline of the Romanian population has been extraordinary in recent decades, so the specific development indicators may have grown extremely dynamically because the same amount of production per capita could have increased.
Even without the viral crisis, the population of Romania is constantly declining. Some are almost worried about the depletion and disappearance of Romania. Alexandru Puiu, according to an article writer for Playtech.ro, the previously 23 million Romanian population has shrunk to 19 million by 2020, but four million of the remaining 19 are still in the country. According to him, outward migration is preceded only by Syria, which is in a civil war.
The number of births “in free flight” does not give too many reasons for optimization either: taking into account all the effects, the population of Romania could decrease to 15 million by 2070.
László Barbély, Puiu, one of the Romanian government ‘s officials responsible for sustainable development, was quoted as saying. Barber warns that social welfare systems could collapse in the country if it does not change processes. There will be no one to pay pensions in an aging society and in an evacuating country.
The inactive According to Puiu, the population share in Romania is 34 percent – the second worst indicator in Europe.
From all this, the current trend is for Romania to catch up with Europe and thus with Hungary. On the other hand, fewer and fewer Romanians are becoming more and more, and this is an extremely spectacular development. However, demographic troubles may sooner or later affect the economy – and in the midst of the viral crisis, it is extremely difficult to predict how Hungarian or Romanian economic development will develop.
To be sure, European statistics on R&D, R&D, teachers and academics tend to end up in both countries at the end, so in the longer term, both should invest in knowledge capital, then only sustained economic growth is expected. and until then, the strange number war continued, which could be made even more tragic by the viral crisis.