Regions and Cities at a Glance 2018 – HUNGARY http://www.oecd.org/regional

Economic trends in regions

Regional gap in GDP per capita, 2000-16 Index of regional disparity in GDP per capita, 2016

GDP per capita in USD PPP Top 20 % richest over bottom 20% poorest regions 2016 2000 40 000 Ratio 4 Small regions Large regions Highest region (TL3) (TL2) 35 000 Central Hungary 30 000 37 457 USD 3 Hungary 25 000 27 620 USD 20 000 2 Lowest region 15 000 Northern Great Plain 10 000 15 719 USD 1 2000 2005 2010 2016

Country (number of regions considered) The gap in GDP per capita between Hungarian regions increased significantly between 2000 and 2007, subsequently remained stable until 2013, and then started to decrease. The GDP per capita in Northern Great Plain – the Hungarian region with the lowest GDP per capita – has grown by 5% per year since 2013, two times the growth rate of the country over the same period. Regional economic disparities have nonetheless increased moderately since 2000. Hungary has the 2nd highest regional disparities in GDP per capita among 30 OECD countries with comparable data. Productivity growth in Hungarian regions was above OECD average over the last sixteen years, with growth ranging from 1.4 % per year in Central Hungary to 2.3% per year in Western Transdanubia. The youth unemployment rate in Northern Great Plain reached 17% in 2017, more than twice the level of Central Hungary, and slightly above the 15% OECD average.

Productivity trends, most and least dynamic regions, 2000-16 Youth unemployment rate, 15-24 years old, 2007-17 GDP per worker in USD PPP W. Transdanubia: rate (%) 70 000 highest productivity in 50 65 000 2016 and highest 40 60 000 productivity growth Highest rate 55 000 (+2.3% average annual 30 Northern Great Plain 50 000 Hungary growth over 2000-16) 17% 45 000 20 Central: lowest OECD Hungary 10.7% 40 000 productivity growth 10 Lowest rate 35 000 (+1.4% annually) 30 000 Central Hungary 0 6.8% 2000 2005 2010 2016 2007 2012 2017

Source: OECD Regional Database. Notes: (1) Figure on regional gap in GDP per capita: OECD regions refer to the administrative tier of subnational government (large regions, Territorial Level 2); Hungary is composed of 7 large regions. (2) Figure on index of regional disparity: top (bottom) 20% regions are defined as those with the highest (lowest) GDP per capita until the equivalent of 20% of national population is reached, this indicator provides a harmonised measure to rank OECD countries, using data for small regions (Territorial Level 3) when available. (3) Productivity is measured as GDP per employee at place of work in constant prices, constant Purchasing Power Parities (reference year 2010).

Updated the 5th of March 2019 Differences in well-being across regions

Top region Bottom region Central Hungary Planning statistical regions

Western Central Central Transdanubia Central Hungary

top top 20% Hungary Hungary (1 to 402) to (1

Southern Transdanubia Central Hungary middle middle 60% Northern Great Plain Northern Southern Central Hungary Western Northern Great Plain Transdanubia Hungary Central Transdanubia Northern

Ranking Ranking OECD of regions Northern Hungary Southern Great Plain Western Great Plain Great Plain Transdanubia Northern Hungary Northern Central Northern Hungary bottom bottom 20% Hungary Great Plain Northern Hungary

Jobs Safety Access to Education Community Health Civic Environment Housing Life Income services Engagement Satisfaction Relative ranking of the regions with the best and worst outcomes in the 11 well-being dimensions, with respect to all 402 OECD regions. The eleven dimensions are ordered by decreasing regional disparities in the country. Each well-being dimension is measured by the indicators in the table below.

Central Hungary shows the best outcomes in the country in more than half of the well-being dimensions considered. The region ranks among the top 25% of the OECD regions in education, access to services and jobs, aspects of well-being that also show the largest regional differences in Hungary. All Hungarian regions rank among the bottom 20% of the OECD regions in health and life satisfaction. The top performing Hungarian regions fare better than the OECD median region in five of the thirteen well-being indicators: employment and unemployment rates, homicide rate, share of households with broadband access, labour force with a secondary degree and perceived social network.

Country OECD median Hungarian regions Average region Top 20% Bottom 20% Jobs Employment rate 15 to 64 years old (%), 2017 67.1 67.7 70.5 62.3 Unemployment rate 15 to 64 years old (%), 2017 4.2 5.5 2.4 7.1 Safety Homicide Rate (per 100 000 people), 2016 1.0 1.3 0.6 1.4 Access to services Households w ith broadband access (%), 2017 82.0 78.0 89.0 75.4 Education Labour force w ith at least upper secondary education (%), 2017 87.2 81.7 91.9 82.1 Community Perceived social netw ork support (%), 2013 88.6 91.4 90.6 84.7 Health Life Expectancy at birth (years), 2016 76.2 80.4 77.6 75.0 Age adjusted mortality rate (per 1 000 people), 2016 11.1 8.1 10.3 12.0 Civic engagement Voters in last national election (%), 2017 or lastest year 62.6 70.9 65.0 58.3 Environment Level of air pollution in PM 2.5 (µg/m³), 2015 20.3 12.4 18.4 22.0 Housing Rooms per person, 2016 1.2 1.8 1.3 1.1 Life Satisfaction Life satisfaction (scale from 0 to 10), 2013 5.0 6.8 5.2 4.6 Income Disposable income per capita (in USD PPP), 2016 11 000 17 695 11 329 9 681 Source: OECD Regional Database. Visualisation: https://www.oecdregionalwellbeing.org. Notes: (1) OECD regions refer to the first administrative tier of subnational government (large regions, Territorial Level 2); Hungary is composed of 7 large regions. (2) Household income per capita data are based on USD constant PPP, constant prices (year 2010).

Updated the 5th of March 2019 Metropolitan areas in the national economy

OECD population is concentrated in cities* Percentage of population in cities, 2016 UnitedHungary States OECD average

people outside cities 30% people in cities 37% with population people in cities people 9.8 million 30% 1.2 billion outside cities above 500 000 55% with population people - 63% people - 70% above 500 000 live in cities live in cities people in cities with 6% 12% population between 50 000 and 250 000 9% people in cities with 21% people in cities with population between population between people in cities with population 50 000 and 250 000 250 000 and 500 000 between 250 000 and 500 000 Source: OECD Metropolitan Database. Number of cities: 19 Hungary and 1 138 in the OECD.

In Hungary, 63% of the population lives in cities of more than 50 000 inhabitants. The share of population in cities with more than 500 000 people is 30% compared to 55% in the OECD area.

Importance of metropolitan areas Contribution of metropolitan areas to GDP growth Cities above 500 000 people, 2016 Cities above 500 000 people, 2000-16

% Hungary OECD average % Hungary OECD average 80 80 68% 70 63% 58% 70 60 55% 60 46% 54% 50 42% 50 40 30% 40

30 30 areas 20 20

10 Budapest

10 327metropolitan 0 0 % of national % of national % of national All metropolitan1 areas Largest contributor2 GDP employment population

The metropolitan area of Budapest accounts for 46% of national GDP and 42% of employment. Between 2000 and 2016, it generated 54% of the national GDP growth. In terms of GDP per capita, Budapest ranks below the median of the 327 OECD metropolitan areas. In terms of PM 2.5 levels, Budapest is among the 20% most polluted OECD metropolitan areas. OECD Metropolitan areas ranking Cities above 500 000 people

USD PPP 100 000 80 000 GDP per 60 000 40 000 capita, 2016 20 000 0 Top 20% richest Bottom 20% poorest metropolitan areas metropolitan areas

Lev el of air pollution in PM 2.5 (µg/m³) 30 Air pollution 20 (PM2.5), 2017 10 0 Top 20% least polluted Bottom 20% most polluted metropolitan areas metropolitan areas

Source: OECD Metropolitan Database. Number of metropolitan areas with a population of over 500 000: 1 in Hungary compared to 327 in the OECD. * Note: Cities are defined here as functional urban areas, which are composed by high-density urban centres of at least 50 000 people and their areas of influence (commuting zone). For more information, see: http://www.oecd.org/cfe/regional-policy/functionalurbanareasbycountry.htm.

Updated the 5th of March 2019 Subnational government finance

Subnational government expenditure by function As a share of total subnational government expenditure, 2016

Hungary 00 OECD average

Other 31% 11 15% Other General public services 23% 22 14% General public services

Economic affairs 17% 33 14% Economic affairs

Education 15% 44 25% Education

Social protection 10% 55 14% Social protection

Health 3% 66 18% Health

Subnational expenditure per capita: USD 1 609 77 USD 6 817

Subnational government expenditure amounts to USD 1 609 per capita in Hungary compared to an OECD average of USD 6 817. In Hungary, this is equivalent to 12.9% of total public expenditure and to 6% of GDP. In comparison, across the OECD, subnational government expenditure accounts for 40% of total public expenditure and for 16% of GDP. The function ‘Other’ (which includes housing and community amenities, recreation, culture and religion; environment; public order and safety) and general public services are the two largest spending items for subnational governments in Hungary: together they represent 54% of subnational expenditure compared to 29% in the OECD area. In Hungary, 27.3% of total public investment was carried out by subnational governments compared to an OECD average of 56.9%. Role of subnational governments in public investment Subnational government public investment per capita, 2016

USD per capita Hungary OECD average 1 400

1 200 Total public investment 1 000 USD 1 278 per capita 3.0% of GDP 800 Total public investment USD 741 per capita 600 2.8% of GDP Subnational government 400 Subnational government investment investment 200 USD 727 per capita USD 205 per capita 56.9% of public invest. 0 27.3% of public invest.

Source: OECD Subnational Government Structure and Finance Database.

OECD Regions and Cities at a Glance 2018 The 2018 edition of OECD Regions and Cities at a Glance shows how regions and cities contribute to national growth and the well-being of societies. It updates its regular set of region-by-region indicators, examining a wide range of policies and trends and identifying those regions that are outperforming or lagging behind in their country. Consult this publication on line: https://oe.cd/pub/2n9

Updated the 5th of March 2019