Hungary’s economic outlook for 2015 has improved substantially: the economy is expected to grow this year by more than 3 percent and as a consequence the Government has revised its growth prognosis for the current year from 2.5 percent to 3.1 percent, Minister for National Economy Mihály Varga stated at the general meeting of SwissCham Hungary.
The Minister pointed out that Switzerland is the seventh largest investor of Hungary, constituting 2.71 percent of total investment volume; the number of Swiss companies operating in Hungary is estimated at 300 and the number of employees at some 40 thousand.
Swiss investment projects of recent years, such as those by Nestlé, Phoenix Mecano or Stadler, are good examples for the appeal of the Hungarian business environment. This year, a much-awaited event is the completion of the Sárospatak project of Fraisa Hungária Ltd, he added.
Speaking about Hungarian economic achievements, Mihály Varga highlighted the fact that Hungary’s economic growth reached 3.6 percent last year. Recently published data are not only better than prior expectations, but they also beat the EU average, and Hungary has become the country with the second highest economic growth figure within the EU.
Labour market trends are also favourable, he stressed. The number of people in employment grew year-on-year by 111 thousand, or 2.8 percent, in the period December 2014-February 2015. Concurrently, the unemployment rate improved by 0.7 percentage points over one year, falling to 7.4 percent, he said.
Subdued inflation, he continued, has also been favourable for economic processes and growth. In March 2015, consumer prices in Hungary were 0.6 percent lower than in the same period of the previous year.
The general government budget deficit – according to the EU methodology – was 2.6 percent of GDP in 2014. This indicator is expected to be 2.4 percent this year and 2 percent next year. The general government debt-to-GDP ratio has also been on a descending path: since 2010 it fell by 4.0 percentage points to 76.9 percent by the end of 2014. This figure is one of the best within Europe, the Minister said.
Last year, the value of investments was HUF 5200bn (EUR 17.3bn) in Hungary, which constitutes an increase of 14 percent year-on-year. The main factors were machinery investment projects, which soared by 24 percent, and construction sector investment.
The minister called it very promising that trade relations with Switzerland has been improving, and the value of bilateral trade totals some EUR 1.3bn. With regard to the trade of business, transport and government services, in 2014 Switzerland was Hungary’s fifth largest export destination.
The Minister stressed that the future of the agreement on the free movement of labour concluded between Switzerland and the EU will be a long-term issue. In line with the stance of the EU, in the opinion of Hungary – while respecting the outcome of the Swiss referendum – the termination of the free labour agreement would adversely affect both Swiss and Hungarian jobseekers.
Swiss enterprises, such as Stadler, Nestlé or Roche, have a basically positive opinion of the Hungarian investment environment, the main priorities of the Hungarian economic policy, the quality of labour force, but they also demand changes in certain fields. It is also very encouraging, he pointed out, that every Swiss enterprise would once again pick Hungary as investment destination and they are planning further expansion.
Finally, Mihály Varga said that Hungary very highly appreciates that the country has received CHF 132 million from the Swiss Contribution Fund, which is aimed to reduce economic and social disparities. The Fund enables the realization of significant development projects in Northern and Eastern Hungary, in the field of environmental protection, infrastructure, social development, tourism and R&D.
(Ministry for National Economy)
