Economics of Tobacco in Hungary
Since 1994, Hungary has witnessed a decline in total and per capita cigarette
consumption, thanks to the increase of real cigarette price. This again proves that price
measure is a very effective way to fight smoking. Currently, tax accounts for 61% of
cigarette retail price in Hungary, lower than virtually all EU countries. There are still
plenty of rooms for tax hikes and price increases for cigarettes, which would curb
smoking epidemic in Hungary further.
Fighting smoking would not affect Hungary’s economy in the long run. In 1999, tax
revenues from cigarettes only accounted for 3% of total government tax revenue, lower
than most of its ECA counterparts. In terms of trade, Hungary is also a net tobacco
product importer. Meanwhile, employment in the tobacco manufacturing industry is very
small and is declining rapidly.
In 1999, Hungary accounted for about 2% of Europe and Central Asia (ECA) region’s
cigarettes consumption. Generally speaking, ECA region is a place with serious smoking
problems. With about 8% of world’s population, ECA region consumed 16% of world
cigarette consumption in 1999.
Hungary's Cigarette Consumption Share in ECA
and ECA's Share in the World, 1999
Rest of the
Rest of ECA
Note: ECA countries include Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria,
Croatia, Cyprus, Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyz Republic, Latvia,