Official name: Hungary
Area: 93 022 km2
Population: 9 797 561 (2017)
Official language: Hungarian
State form: Republic
Capital and largest city: Budapest (population: 1 729 040)
Other large cities: Debrecen, Szeged, Miskolc, Pécs, Győr
Currency: Forint (HUF)
Time zone: CET (GMT +1)
GDP Growth: 5.2 % (2019 Q1)
GDP/Capita: 20,334 (2018)
Hungary is a member of OECD, NATO, EU, IMF and the Schengen Convention.
In terms of macroeconomic indicators, the competitiveness of the Hungarian economy has improved significantly in the past years. Starting from 2010, due to problems in the competitiveness of enterprises in the manufacturing of electronic and optical products (which had previously been a leading sector), Hungary’s export market share diverged from the region. However, because of the large investment projects implemented in the automotive industry, the growth of Hungary’s export market share exceeds the average of the Union. Foreign trade competitiveness improved further by the improvement in the terms of trade and in corporate profitability resulting from the decline in commodity prices. The considerable decline in external debt observed in recent years contributed significantly to the improvement in Hungary’s external vulnerability as well as its risk assessment.
Labour market competitiveness
Examining the past years’ labour market developments in the European Union, Hungary’s lag in the activity and employment rate, which had been significant before, ceased to exist by 2016. The upturn in economic activity and fiscal measures aimed at boosting labour market activity contributed to the vigorous growth in employment in Hungary after 2010. The rise in employment resulted in a gradual decline in labour reserves. Despite the decline in available labour reserves, enterprises did not reduce their labour demand, resulting in a tightening labour market. As a result of this tightening and the improving economic prospects, wages also started to rise, supported by minimum wage increases as well, in addition to government career path models and sectoral wage rises. With e-governance gaining further ground, both the efficiency of the sector and the utilisation of labour reserves within public administration could be improved more.
Research, development and innovation
In Hungary, the R&D expenditures-to-GDP ratio increased from 0.9 percent to 1.4 percent between 2005 and 2015. Both in a regional and EU comparison, the ratio of those employed in the high-tech sector is outstanding in Hungary. Moreover, as opposed to the stagnation observed in the other countries, this ratio increased further in Hungary in the past years. Compared to the EU, both the price and penetration of broadband internet are favourable in Hungary. In terms of 4G coverage and mobile internet speed Hungary is one of the leaders in the world. At the same time, mobile phone subscription fees are among the highest in the OECD countries.
As a result of regulatory interventions, at purchasing power parity, energy prices for households declined to moderate levels. However, the prices of gas and electricity for companies are still higher than the averages in the EU. In relation to that, the ratio of net energy imports of Hungary is also high and does not decline. In the area of the use of renewable energy sources Hungary has reached its EU target set for 2020.