About Hungary

Hungary

Land area:  93,030 sq km; Population: 9,855 571 ( 2015)

Hungay lies in Central Europe bordered by Austria, Slovakia, Ukraine, Romania, Serbia, Croatian and Slovenia.

  • Location: EU common market of more than 500 million people
  • EU-member since 2004
  • Easy access to the EU member states
  • At the cross roads of 4 main European transportation corridors
  • Extensive road and railway transportation network
  • Highly developed logistics and telecommunications infrastructure
  • Membership in OECD (1995),WTO (1996), EU (2004)
  • Currency: Hungarian Forint (HUF) Hungary as a member state of the European Union may seek to adopt the common European currency, the Euro
  • Distribution of GDP: agriculture (3,4%);industry ( 31.1 %); tercier (65,5%)

The economy of Hungary

Since taking power in a landslide election victory in the spring of 2010, the Hungarian government has set about reforming the key pillars of the economy in order to boost activity and employment.

Main elements of the new Hungarian economic reform:

Tightening the rules for early retirement, * introducing a flat-tax (with tax allowances for families), *  mandating the shortest unemployment benefit periods in Europe, * a cost-efficient education system, * a work-based social-security system,  * securing financial and fiscal stability (Public debt target: 50%; Budget deficit  target: < 3%; Inflation target of the Central Bank of Hungary: 3%),*  improving business environment, * promoting foreign and domestic private investments,

Accordingly the following  the regulations were put into force:

  • New labour code (effective from 1 July 2012) in favour of employers
  • New act on vocational training in favour of business needs
  • Tax preferences (corporate tax reduced from 19 % to 9 % from 1st of January 2017)
  • Lending for Growth program by up to USD 9 billion for recovery of the SME sector
  • Foreign market prospects of SMEs are supported by EXIMBank’s Microcredit  lending program
  • As part of the new foreign trade strategy “Opening towards the East”, the Hungarian National Trading House established by theHungarian Government seeks new markets and new opportunities for Hungarian SME-s. Altogether 25 trading houses were set in Asia and Africa. Strategic agreements between the government and 52 top investors created 14.000 jobs in the country

The economic events of the past years have put corporations’ adaptability to the test.

the Hungarian economy has found its way back to balance, which is the basis for growth.

  • GDP growth (2015) 2.9 %
  • GDP per capita: (2015) USD 12358
  • Inflation rate: (2015) -1.3 %
  • Decreasing unemployment rate: (2015) 6.8%
  • General government deficit; (2015) 2,0% – below the EU criteria of 3%
  • Debt-to-GDP ratio: (2015) 75,3% decreasing but still high,
  • In 2015 industrial production was by 7.2% higher than in 2014.
  • The volume of retail sales rose year-on-year by a calendar adjusted 5.6% in December 2015. The volume of sales rose by 3.4% in food, drinks and tobacco stores, by 7.6% in non-food retail trade and by 7.1% in automotive fuel retailing.

In January–December 2015, the value of exports was USD 100.4 billion, while that of imports was USD 91.4 billion. Exports and imports grew by 7.9% and 7%, respectively.

Commodity pattern of Hungarian external trade in 2015

Export USD 100.4 billion Imports EUR 91.4 billion
Export goods Food and beverages

(7.3%)

Crude materials

(2.3%)

Fuels, electric energy

(2.3%)

Manufactured goods

(31.0%)

Machinery and Transport equipment

(57.1%)

Import goods Food and beverages      (5.2%)

Crude materials            (2.1%)

Fuels, electric energy 

(8.1%)

Manufactured goods

(35.4%)

Machinery and Transport equipment                    (49.1%)

Main

export partners

Germany 27.3%

Romania   5,2%

Slovakia    5.0%

Austria      4.8%

Italy          4,7%

France     4,6%

 

Main Import partners Germany 26,0%

 Austria      6.6%

 China       5.7%

 Poland     5.5%

 Slovakia   5,4%

 France      5.0%

 

In 2015 the share of the EU was 79.2% in exports and 76.5% in imports, while the share of Asian countries was 5.7 % in exports and 12.8% in imports.