The Hungarian economy is currently the fastest growing economy in the European Union and achieved almost 5 percent growth in 2019, to which a strong 14 percent increase in investment also contributed significantly.

During the whole of last year, a higher volume of investment than ever before of 10,556 billion forints (EUR 31.11 billon) was realised in Hungary, with the investment rate increasing by 28.6 percent, a standard of performance that also puts Hungary among the frontrunners in the European Union.

According to the latest data published this morning by the Central Statistical office, Hungary’s GDP grew at a rate of 4.9 percent last year, which was significantly contributed to by the continued rapid year-on-year expansion of industry and the construction industry. In addition to the outstanding performance of the production sectors, almost half of growth was derived from services, thanks in part to the fact that the annual increase in wages increased to two digits as a result of the six-year wage agreement.

Parallel to this, on the consumption side, domestic demand provided the main impetus for dynamic growth: both consumption and investments contributed significantly to growth. In addition to the housing construction realised within the framework of the Home Creation Programme and the efficient application of EU resources, the favourable figures for the latter were also facilitated by the reduction in the rate of corporation tax to just 9 percent in 2017, which is expected to continue to reinforce Hungary’s capital attraction capability.

Based on the latest available figures, the volume of gross fixed capital investments in Hungary increased by 78 percent between the first quarter of 2010 and the fourth quarter of 2019, a result that places Hungary at the number one spot in the region. The favourable processes of the upcoming period are being facilitated, amongst others, by the growth incentive measures of the Programme for a More Competitive Hungary and the many high-volume development projects announced recently, mainly with relation to the automotive industry and the supplier network, while the activity of SMEs is being supported by the low yield environment and the favourable business climate. The increase in investment is also facilitating the economic performance of future years in view of the fact that following the development of capacities, these development projects will continue to increase economic trends following the start of production.

(Ministry of Finance)