Calculation of the Local Added Value of Hungarian Cities With County Status – Micro and Macro Level Economic Analysis Practices in Hungary

Abstract

The effects influencing the economy – currently the pandemic, the ongoing Russian-Ukrainian conflict, rising energy prices, and high inflation – have been changing significantly and unpredictably in recent times. Therefore, it is essential to assess the characteristics that can be observed in the economic engines of Hungary, namely the major cities. Firstly, we present the limitations, accuracy, and practical feasibility of GDP calculation methods based on bottom-up and top-down approaches. In the analysis, we opted for the top-down approach, utilizing county-level GDP data and local business tax values. Thus, we obtained the local GDP values for the examined 24 cities and compared them with county and national GDP trends. It can be concluded that these cities possess a significant economic weight, accounting for over 63% of Hungary's gross domestic product. Examining GDP trends, not every major city exhibits a higher growth rate compared to the national average achieved between 2010 and 2020. Nearly half of the major cities exceeded the national growth rate of 75%, even achieving expansions of up to 120%, while the remaining ones fell below this pace. This information can be valuable for cities as it can provide a basis for targeted, future-oriented economic development strategies.