Romania outperforms Hungary on one of the most important economic indicators

According to the latest data from Eurostat, the statistical office of the European Union, Hungary's GDP per capita (in terms of purchasing power parity) was 76.6 percent of the EU average, while in Romania it was 76.7 percent, Portfolio observed. In other words, it is now official that Romania is ahead of Hungary when it comes to the most well-known indicator of development.

The data released by Eurostat on 11 October is the statistics on the revised GDP per capita, which confirms the main finding based on the preliminary data published in March: based on the economic development indicator, Romania has overtaken Hungary.

While Hungary has been rapidly catching up with the EU average over the last decade or so, Romania has been catching up at an even faster pace. Romania was at 54.6 percent in 2013, but by 2022 it will be close to 77 percent, an improvement of 22 percentage points,

which is 2.5 times the Hungarian rate.

Portfolio's analysis notes that over the past 10 years, the Hungarian economy has achieved the 11th fastest convergence to the EU average, but those ahead of it in the ranking are typically almost all regional competitors, meaning that while the Hungarian economy is catching up with the EU average, its relative performance compared to other countries in the region is on the decline.

In terms of GDP per capita (measured at purchasing power parity), there are now only 5 countries behind Hungary: Latvia, Croatia, Slovakia, Greece and Bulgaria.

It is important to note that the EU average in this case is not the level of Western countries, so the imaginary 100% is not the level of development of say Germany, Sweden or Austria. These countries are at a higher level of economic development than the EU average. When calculating EU average, the countries in the east and south are pulling down the high numbers of those in the west and north.

The other important point is that while GDP is indeed a very important indicator, it does not accurately reflect the living standards and incomes of a country's citizens.