According to the latest data by the Hungarian Central Statistical Office (KSH), the domestic tourism sector – building upon the trend of recent years -- has continued to expand this year. In the initial seven months of 2016, the volume of revenues at accommodation establishments rose by 5.5 percent year-on-year, and the number of tourism nights totalled some 15.25 million compared to the corresponding period of the previous year. In July 2016, the number of arrivals was up year-on-year by 8.2 percent at Hungarian accommodation establishments. In the first seven months of the year, turnover at accommodation establishments increased at current prices by 7.2 percent, to HUF 216.1bn (EUR 690 million) in comparison to the same period in 2015. In this regard, Hungary’s performance is impressive when compared to the Visegrad Four or other countries in the region.
According to the August edition of Trends in Lending by the National Bank of Hungary (MNB), the volume of corporate lending grew by 5 percent over the past one year, and by the end of the second quarter of 2016 loan disbursements exceeded repayments in the retail segment. In light of the survey conducted by the MNB, which also acts as the supervisory body of the bank sector, in the past quarter lending conditions were typically eased and this has resulted in loan demand growth.
In the second phase of the Horizon 2020 SME Instrument, another Hungarian enterprise has recently gained the trust of tender committees, and thus the number of successful Hungarian applicants benefiting from this Brussels-based direct funding scheme has risen to sixteen.
Having increased the employment rate in the previous EU programming period and improved corporate R&D spending, Hungary has created a stable macro-economic environment in a bid to underpin scientific and technological development. This has been coupled with rising productivity indicators, thanks partly to the fact that R&D funding was not reduced even in crisis years.
Hungary’s GDP grew year-on-year by 2.6 percent in the second quarter of 2016. The main drivers of the expansion were the market services, industrial and agricultural sectors. The performance of the construction sector has, nonetheless, continued to drag down economic growth.
In terms of closing the economic gap with the rest of Europe, Hungary has not been among the best performers of the countries which joined the EU after 2004, but since the financial crisis the Hungarian economy has been on a stable growth path, and this – together with the relatively high added value by labour – signals a promising future. A positive consumption trend also points to further improvement in the quality of growth, which means that the share of added value relative to total output produced in Hungary can be further increased. To this end, the Hungarian Government has introduced significant measures, and thus – along with the favourable effect of EU operative programmes – balanced economic growth can be predicted.
According to the latest report of the Hungarian Central Statistical Office (KSH), in June 2016 Hungary’s foreign trade surplus reached EUR 1129 million, the highest amount ever. Experts believe that this marked growth stemmed from the 5 percent year-on-year increase of the volume of exports as well as from the modest increase in imports. The massive trade surplus has also boosted the current account surplus and reduced the country’s state debt, which factors are key determinants concerning Hungary’s debt ratings.
The 7th European Summit of Regions and Cities was held on 8-9 July 2016 in Bratislava, Slovakia, which event focused on, among others, the efficiency of the utilization of EU funds in individual EU member states. Several EU countries are behind schedule in terms of launching the tender system for the period 2014-2020, and thus they could until recently present only a limited number of invoices for Brussels.
Spending on research, development and innovation rose, albeit slightly, to 1.39 percent of GDP last year in Hungary, the National Research, Development and Innovation Office (NKFIH) has recently reported. It is one of Hungary’s main economic policy objectives to increase this figure and boost R&D to improve competitiveness in the country.
The 7th European Summit of Regions and Cities, organized by the European Committee of the Regions, was held in Bratislava on the second weekend of July 2016. At this event, one of the most hotly debated topics was the efficiency of the absorption of EU funds in member states. With regard to the previous programming period, the Hungarian Government has managed to fully utilize available grants, and achieve the highest contracting ratio, more than 100 percent, the auditor KPMG’s latest progress report on the management of EU cohesion funds in Central and Eastern Europe concludes. Hungary is well positioned to reach a high contracting ratio and realize a timely payment schedule in the period 2014-2020 as well.