HUNGARY


A landlocked country with a large number of spa towns and hot springs
Home to Lake Balaton, the largest lake in Central Europe, Rubik’s cube and ballpoint pen.

Total area: 93,030 sq km (smaller than Indiana)
Population:  9.77 million
Government type: Parliamentary democracy
Administrative division: 19 counties (called “megye”), 23 urban counties (called “megyei varos”), and 1 capital city (called “fovaros”)
Capital + other major cities: Budapest (1.7 million) + (Debrecen (204,000), Miskolc (173,000), Szeged (165,000), Pecs (157,000), Gyor (128,000)
Currency: forint (HUF)
Languages: Hungarian (official) 99.6%, other or unspecified 0.4%
Ethnicity: Hungarian 84%, Roma 3%, Germans 1.3%, undeclared 15%
Religion: Roman Catholic 37%, Calvinist 11%, Lutheran 2.2%, Greek Catholic 1.8%, other 0.5%, atheist 1.5%, unaffiliated 16.7%, undeclared 27.2%
President: (Mr.) Janos ADER (since 10 May 2012)
Prime Minister: (Mr.) Viktor ORBAN (since 29 May 2010)
Date of EU accession: 1 May 2004
mapa



KEY FEATURES

  • Highly skilled and educated workforce of 9 million consumers
  • Borders seven other European countries
  • One of the least regulated economies in the CEE region
  • One of the most wanted FDI destinations in Europe
  • Strong automotive, electronics and service sector
  • The most developed biotech sector in the CEE region

MACROECONOMIC OVERVIEW

Hungary, similar to population and size to the Czech Republic, is one of the least regulated economies in the CEE region and one of the most wanted FDI destinations in Europe. The country has imposed austerity measures to overcome the consequences of the global economy crisis and unreasonable fiscal policy of the previous government, which helped to get Hungary back on the growing curve. Hungary has experienced strong growth for several years. GDP growth was largely supported by the surge in the disbursement of EU funds and rising disposable income. GDP growth was expected to have remained robust at around 4% (4.8% according to Hungarian Central Statistics Office, with a quarterly growth reaching up to 5% in the last three months of 2018). However, the domestic cycle has peaked, while export growth has remained modest, which could bring economic growth down to 3.4% in 2019 and 2.6% in 2020.


The country has excellent infrastructure, ready-made industrial sites, offices and science parks and ranks 52nd in the World Bank’s Ease of Doing Business 2019 ranking surpassing e.g. Luxembourg.



Selected economic indicators, Hungary, 2012 - 2018

    2012 2013 2014 2015 2016 2017 2018
GDP
Real GDP growth
%
-1.7
1.9
3.7
2.9
2.3
4.1
4.9
GDP at current prices
€ bn
98.97
101.27
104.24
108.75
113.90
124.05
131.93
Foreign trade
Exports
€ bn
85.93
89.01
93.04
100.15
102.20
109.47
114.16
Imports
€ bn
79.28
81.68
85.46
90.80
90.80
100.09
107.86
Balance
€ bn
6.65
7.39
7.57
9.35
11.4
9.38
6.3
Prices
CPI - average inflation rate
%
5.7
1.7
0.0
0.1
0.4
2.35
2.85
PPI - industry - average
%
4.1
0.6
-0.4
-1.0
-1.7
3.3
5.5
Employment
Registered unemployment
%
11.0
10.3
7.7
7.3
7.0
6.7
6.5
Average monthly gross wage
771
777
770
800
1,082
1,220
Exchange rates
HUF/USD average
224.95
223.57
232.56
279.35
281.52
274.43
270.21
HUF/EUR average
289.25
296.87
308.57
309.86
316.64
309.28
318.89


Source: Hungarian Central Statistical Office, Hungarian National Bank, Eurostat, IMF, 2017-2018



KEY SECTORS


The agricultural sector, which has been the dominant force in the country's economy for many years, now represents 3.3% of GDP and employs 4.75% of the working population today. Cereals, fruits, vegetables and wine are the main crops.


Industry accounts for 26.44% of the country's GDP and employs slightly less than 30% of the working population and is very open to foreign investment (manufacturing almost consistently ranks top receiver of foreign direct investment). The automotive and electronics sectors are the two main industrial sectors, representing 30% of exports and 15% of GDP.


The services sector contributes 54.85% of GDP and employs almost 65% of the labour force. S&P and Fitch upgraded Hungary's credit rating early 2019, noting that the services sector has become competitive and boosted exports.


Automotive sector

The automotive industry is a key sector in Hungary, for it is a leading supplier for Central and Eastern European countries. Automotive sector, one of Hungary’s core industries, generates 21 % of total exports. The labour force in Hungary is well-educated but not fully employed, which makes it likely for the automotive sector to grow in the following years.


Construction

The bulk of the construction industry spending over the next few years will be devoted to the transport sector, where there is strong demand for new road and rail facilities. The market is hampered by strong price competition and local regulations, but there are business opportunities in the construction sector, as well as in the emerging regeneration and property development sectors.


ICT

The Hungarian ICT sector is a well-established and developed industry. The total ICT market in Hungary accounts for about 7.1% of the country’s GDP. The market is expected to grow further, under the influence of the private sector. Fierce competition has led to price and profit decrease in the hardware market.


Food and drink

The Hungarian food industry plays an important role in Hungary’s economy, with a total estimated value of about €8 billion. It represents around 14% of the total processing industries, buying 75% of the local agricultural produce, which accounts for 8% of Hungary’s total exports. It accounts for 5% of the GDP employing 5% of the active population.


Biotechnology

The importance of the biotechnology sector in Hungary is supported by the fact that biotechnology is one of the fastest growing sectors, which, due to its highly knowledge-intensive nature, creates knowledge-based jobs. Conditions in Hungary are conducive to the consolidation of the biotechnology industry (world-class basic research results, highly qualified researchers, outstanding traditions of the pharmaceutical industry and strength in related industries). The leading Hungarian biotechnology companies target mainly export markets (the EU, USA, Japan). Their presence in the world not only enhances the reputation of Hungarian biotechnology, but of high-tech industries as a whole.


EXPORTS & IMPORTS


Hungary belongs among the most open economies to international trade in Europe, in fact, Hungary’ s exports/gdp ratio at around 90% is the third highest in the EU and is surpassed only by Luxembourg and Slovakia.


2017 export and import data:




Main import partners:
Germany - 26.2%
Austria - 6.3%
China - 5.9%
Poland - 5.5%
Slovakia - 5.3%


Main export partners:
Germany - 27.7%
Romania - 5.4%
Italy - 5.1%
Austria - 5.0%
Slovakia - 4.8%


Hungary external trade - 2015




See references for our track record in Hungary.



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