Academy of Economic Studies from Republic of Moldova

The Economy
of Hungary

Made by:

Gona Gheorghina, EMREI-132

Verified by:

u Nicolae

Chiinu, 2015

Hungarys economic freedom score is 66.8, making its economy the 54th freest in the 2015 Index.
Its score is down by 0.2 point from last year, with declines in property rights, business freedom,
fiscal freedom, and the control of public spending outweighing improvements in monetary freedom,
labor freedom, and freedom from corruption. Hungary is ranked 25th out of 43 countries in the
Europe region, and its overall score is above the world average but below the regional average.
Hungarys economic freedom peaked in 2013, and declines in the past two years, particularly in
property rights and business freedom, have raised questions about the momentum for further
reform.
Hungarys longer-term economic transition to an open market economy has been highlighted by
improvements in the trade and investment regimes. The business environment is relatively
encouraging to entrepreneurship and risk-taking, and capital markets are developed and open to
foreign investment. Concerns about the rule of law have been increasing over the past few years,
and the government has been struggling with a burgeoning budget and foreign currency debt.
Economy overview
The economy of Hungary is a medium-sized, high-income, structurally, politically and
institutionally open economy in Central Europe, and is part of the European Union's (EU) single
market. The economy of Hungary experienced market liberalization in the early 1990s as part of the
transition from a socialist economy to a market economy, similarly to most countries in the former
Eastern Bloc. Hungary is a member of the Organisation for Economic Co-operation and
Development (OECD) since 1995, a member of the World Trade Organization (WTO) since 1996,
and a member of the European Union since 2004.
The private sector accounts for more than 80% of the Hungarian gross domestic product (GDP).
Foreign ownership of and investment in Hungarian firms are widespread, with cumulative foreign
direct investment worth more than $70 billion. Hungary's main industries are mining, metallurgy,
construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), and motor
vehicles. Hungary's main agricultural products are wheat, corn, sunflower seed, potatoes, sugar
beets; pigs, cattle, poultry, and dairy products.

$241.5 billion (PPP, 2014)

GDP
$137.8 billion (nominal, 2014)
44th (PPP, 2012 est.)
3.9% (2014)
$24,498 (PPP, 2014.)
agriculture: 3.4%; industry: 31.1%; services: 65.5% (2014 est.)
0.07% (August 2015)

GDP rank
GDP growth
GDP per capita
GDP by sector
Inflation
Population below poverty
12.0% (2013 est.)
line
Gini coefficient
24.7 (2009)
Labour force
4.391 million (2012 est.)
Labour force by
agriculture: 7.1%; industry: 29.7%; services: 63.2% (2011 est.)
occupation
Unemployment
6.8% (August 2015)
Average gross salary
781 / 838 $, monthly (2015)
Average net salary
512 / 549 $, monthly (2015)
mining, metallurgy, construction materials, processed foods, textiles,
Main industries
chemicals (especially pharmaceuticals), motor vehicles
Ease-of-doing-business
54th
rank
External
Exports
$99.54 billion (2014)
machinery and equipment 53.5%, other manufactures 31.2%, food
Export goods
products 8.7%, fuels and electricity 3.9%, raw materials 3.4% (2012)
Germany 28.8%
Austria 5.8%
Romania 5.7%
Slovakia 5.1%
Main export partners
Italy 4.8%
France 4.7%
Poland 4%
Czech Republic 4% (2014)
Imports
$96.83 billion (2014)
machinery and equipment 45.4%, other manufactures 34.3%, fuels and
Import goods
electricity 12.6%, food products 5.3%, raw materials 2.5% (2012)
Germany 25.6%
Austria 7.4%
Russia 7%
China 6.2%
Main import partners
Slovakia 5.5%
Poland 5.3%
France 4.8%
Czech Republic 4.6% (2014)
FDI stock
$94.9 billion (31 December 2012 est.)
Gross external debt
$202.7 billion (31 December 2012 est.)

Public debt
Budget deficit
Revenues
Expenses
Economic aid
Foreign reserves

Public finances
76.9% of GDP (2014)
2,64 billion, 2.6% of GDP (2014)
$66.28 billion (2014)
$70.15 billion (2014)
$22.40 billion of EU structural funds from (2007-13)
$3.72 billion of EU structural funds from (2004-06)
$44.8 billion (31 December 2014 est.)

Largest companies in Hungary

The ten largest Hungarian companies in 2014 (with their annual revenue in millions of forints and
growth or contraction compared to the previous year):
1. MOL Hungarian Oil and Gas plc energy industry
2. Audi Hungaria Motor plc car manufacturing
3. GEE Infrastructure CEE Holding plc asset management (mechanical engineering)
4. MVM Hungarian Electricity Ltd. asset management (energy sector)
5. Mercedes-Benz Manufacturing Hungary plc car manufacturing
6. Samsung Electronics Hungary plc electronics
7. Magyar Telekom Telecommunications plc telecommunications
8. E.On Hungary Energetics plc asset management (energy sector)
9. Flextronics International Ltd. electronics
10. Hungarian Suzuki plc car manufacturing
Salaries in Hungary
Average Salary in Hungary

Role

Sector

Industry

Monthly avg gross salary

Sales Manager

Sales

Sales & Marketing 950.000 HUF

Sales Director

Sales

Sales & Marketing 1.400.000 HUF

Receptionist

Executive Support

Executive Support 215.000 HUF

Programmer / Developer

Technology

Technology

975.000 HUF

Mobile Developer

Technology

Technology

1.050.000 HUF

Marketing Manager

Sales & Marketing

Marketing

875.000 HUF

IT Project Manager

Technology

Technology

850.000 HUF

IT Help Desk L2

Customer Service

Shared Services

500.000 HUF

IT Help Desk L1

Customer Service

Shared Services

350.000 HUF

Role

Sector

Industry

Monthly avg gross salary

HR Director

HR

HR

1.250.000 HUF

HR Consultant

HR

HR

500.000 HUF

HR Advisor

HR

HR

400.000 HUF

Shared Services

800.000 HUF

Customer Service manager Customer Service

Compliance Specialist

Accounting & Finance Baning / Insurance 680.000 HUF

Automation Engineer

Engineering

Engineering

575.000 HUF

Prices and Earnings

Hungary Labour
Unemployment Rate
Employed Persons
Unemployed Persons
Long Term Unemployment Rate
Youth Unemployment Rate
Labour Costs
Job Vacancies
Wages
Minimum Wages
Wage Growth
Population
Retirement Age Women
Retirement Age Men
Employment Rate

Last
6.40
4264809.00
292676.00
3.20
15.80
113.60
43742.00
241440.00
333.41
5.10
9.86
65.00
65.00
56.60

Previous
6.40
4250976.00
303837.00
3.40
17.50
117.10
42318.00
241680.00
332.76
5.40
9.91
65.00
65.00
55.70

Highest
11.80
4264809.00
508736.00
5.70
29.40
117.10
43742.00
257929.00
341.70
26.19
10.71
65.00
65.00
56.60

Lowest
5.50
3678730.00
227000.00
2.20
10.90
31.60
21130.00
60268.00
89.15
-5.30
9.21
59.00
60.00
48.00

Unit
percent

percent
percent
Index Points
HUF/Month
EUR/Month
percent
Million

percent

Hungary is not super cheap in every way, but the destination is a good value for people who want
to live a good life for less in Europe. Anyone moving to Budapest from a similarly sized city in
Europe, North America, or Australia can easily cut their expenses in half. And the rest of the
country costs less.
The countryside of Hungary is very cheap, but few expats live in the rural areas unless theyre in
the wine industry. Most choose to live in Budapest, around Lake Balaton, or in one of the smaller
cities like Eger or Pecs.
Hungary got hit hard in the European economic crisis like many other nations on the continent,
but has recovered faster. The official unemployment rate was 8% in mid-2014, which looks
downright glorious compared to Italy, Spain, Greece, or Portugal. In many ways, this feels like a
nation on the rise and the young are displaying something not seen much in the past couple hundred
years of Hungarys history: optimism.

Poverty Level
Nearly half of Hungarians live in households where poverty, unemployment or social
disenfranchisement are present, a representative survey from the Trki polling agency has found.
Demarcating the poverty line as earnings of 60% of the average salary, Trki reported that 17.7% of

Hungarian citizens lived under such conditions in 2012, also the highest number seen since polling
began with regime change.
Trki also characterized 19.1% of the national population as worked poor and classified 36.7% as
living in material circumstances of severe deprivation, the latter defined as conditions in which
four of the nine elements of well-being, e.g. automobile, annual vacation time, adequate heating
resources, are not extant.
Trki further calculated that approximately 47% of Hungarians live in a household in which at
least one of the above-mentioned descriptions apply, and that 8.1% of households experience all
three conditions.
For comparisons sake, the Central Statistics Office (KSH) reported a 32% poverty rate for
Hungary for 2011; the European Union average that year was 24%. Of the EU-28, however, only
Bulgaria (48%), Latvia (40%), Romania (40%), Croatia (33%) and Lithuania (33%) fared worse
than Hungary on that survey.