Search

Home

Criteria List

Page Down

Zoom In

Zoom Out

Print

COMPETITIVENESS TRENDS - OVERALL

HUNGARY
OVERALL PERFORMANCE 04 35 05 31 35 35 38 06 07 08 BASIC FACTS
Capital
2 Land area (km '000)

Rank Budapest 93.0 (2007) 183.83 (2007) 10.07 (2007) 138.0 (2007) 18,509 (2007) 1.3 (2007) 7.9 (2007) 7.4 (2007) 4.24 (2007) -5.0 (2007) 36 45 32 55 49 35 38 39

Exchange rate (per $) Population (millions) GDP ($ billions)

CHALLENGES IN 2008
Attain macroeconomic stability through the reduction of public expenditure. Improve incentives to work in the welfare system. Reform the tax system to promote growth and reduce tax evasion. Cut red tape and improve the quality of legislation. Use the EU structural funds to maximum effect.
Domestic Economy International Trade International Investment Employment Prices

GDP (PPP) per capita ($) Real GDP growth (%) Consumer Price Inflation (%) Unemployment rate (%) Labor force (millions) Current Account Balance (%) Direct Investment Stocks Inward ($ billions) Flows Inward (% of GDP)

Provided by : ICEG European Center

Public Finance

117.0 (2006) 16.4 (2007)

23 4

Fiscal Policy

Institutional Framework

COMPETITIVENESS LANDSCAPE
ECONOMIC PERFORMANCE
4 11 11

Business Legislation

Societal Framework

GOVERNMENT EFFICIENCY
Finance

Productivity & Efficiency

BUSINESS EFFICIENCY

INFRASTRUCTURE

Labor Market

Management Practices

Attitudes and Values

21 25 31 28 33 41 41 39

Basic Infrastructure

Tech. Infrastructure

35

35
Scientific Infrastructure

37 48 55 53 Employment Fiscal Policy International Investment Prices Business Legislation Domestic Economy International Trade Public Finance Institutional Framework 48 51
Health and Environment Education

55 Basic Infrastructure Labor Market Health and Environment Finance Attitudes and Values Productivity & Efficiency Scientific Infrastructure Societal Framework Tech. Infrastructure Management Practices Education

PEER GROUP RANKINGS

EUROPE - MIDDLE EAST - AFRICA POPULATION < 20 MILLION

04 20

05 18

06 20

07 21

08

04 20 23

05 19

06 20

07 21

08

23

146

IMD WORLD COMPETITIVENESS YEARBOOK 2008

Search

Home

Criteria List

Page Down

Page Up

Zoom In

Zoom Out

Print

COMPETITIVENESS EVOLUTION

HUNGARY
The criteria below highlight the 15 greatest Improvements and the 15 biggest Declines in the overall performance of the economy. They are determined by the largest percentage changes in the value of each criterion from one year to the next.

IMPROVEMENTS
1.3.03 1.3.08 3.3.13 2.1.02 1.3.01 1.2.10 1.2.07 1.2.02 1.1.19 4.4.12 4.2.08 1.3.02 4.2.09 3.4.02 2.3.05 Direct investment stocks abroad US$ billions Direct investment stocks inward US$ billions Stock market capitalization % of GDP Government budget surplus/deficit % of GDP Direct investment flows abroad US$ billions Exports of commercial services US$ billions Exports of goods US$ billions Current account balance % of GDP GDP per capita US$ per capita Energy intensity Commercial energy consumed for each dollar of GDP in kilojoules Computers per capita Number of computers per 1000 people / Source: Computer Industry Almanac Direct investment flows abroad % of GDP Internet users Number of internet users per 1000 people / Source: Computer Industry Almanac Ethical practices are implemented in companies (Survey) Central bank policy has a positive impact on economic development (Survey)

WCY 2007 7.84 61.89 21.34 -9.22 16.39 13.19 75.26 -6.49 11,196 12,075 261 14.52 389.51 4.09 5.18

WCY 2008 47.58 116.96 37.16 -5.49 22.85 16.73 94.16 -5.01 13,707 9,839 306 16.55 443.29 4.64 5.84

DECLINES
1.5.01 1.1.13 1.1.14 4.5.15 2.3.07 2.3.10 3.5.05 1.1.18 2.2.13 2.5.04 4.1.16 2.3.13 2.3.15 2.3.08 2.3.12 Consumer price inflation Average annual rate Real GDP Growth % change, based on national currency in constant prices Real GDP Growth per capita % change, based on national currency in constant prices Economic literacy among the population is generally high (Survey) Policy direction of the government is consistent (Survey) Government decisions are effectively implemented (Survey) The need for economic and social reforms is generally well understood (Survey) Resilience of the economy to economic cycles is strong (Survey) Real corporate taxes do not discourage entrepreneurial activity (Survey) The risk of political instability is very low (Survey) Maintenance and development of infrastructure are adequately planned and financed (Survey) The public service is independent from political interference (Survey) Bribing and corruption do not exist (Survey) The legal and regulatory framework encourages the competitiveness of enterprises (Survey) Transparency of government policy is satisfactory (Survey)

WCY 2007 4.0 3.9 4.08 4.96 4.61 4.17 4.17 4.18 5.22 5.22 4.87 2.70 3.22 5.13 3.48

WCY 2008 7.9 1.3 1.43 2.88 2.72 2.50 2.80 2.88 3.60 3.76 3.60 2.00 2.40 3.84 2.64

IMD WORLD COMPETITIVENESS YEARBOOK 2008

147

Search

Home

Criteria List

Page Down

Page Up

Zoom In

Zoom Out

Print

COMPETITIVENESS TRENDS - FACTOR BREAKDOWN

HUNGARY

ECONOMIC PERFORMANCE
04 39 43 05 06 37 07 38 08 39 Sub-Factor Rankings :
Domestic Economy International Trade International Investment Employment Prices

2008
55 11 4 48 48

Strengths
1.3.02 1.3.07 1.3.09 1.2.19 1.2.18
Direct investment flows abroad Percentage of GDP Direct investment flows inward Percentage of GDP Direct investment stocks inward Percentage of GDP Terms of trade index Unit value of exports over unit value of imports (2000 = 100) Trade to GDP ratio (Exports + Imports) / (2 x GDP)

2 4 4 7 8

Weaknesses
1.1.13 1.1.18 1.5.01 1.1.14 1.4.02
Real GDP Growth Percentage change, based on national currency in constant prices Resilience of the economy to economic cycles is strong (Survey) Consumer price inflation Average annual rate Real GDP Growth per capita Percentage change, based on national currency in constant prices Employment Percentage of population

55 54 49 49 47

GOVERNMENT EFFICIENCY
04 37 05 31 06 35 07 40 47 Strengths
2.4.21 2.4.10 2.2.08 2.4.12 2.4.05
Immigration laws do not prevent your company from employing foreign labor (Survey) State ownership of enterprises is not a threat to business activities (Survey) Corporate tax rate on profit Maximum tax rate, calculated on profit before tax Product and service legislation does not deter business activity (Survey) Foreign investors are free to acquire control in domestic companies (Survey)

08

Sub-Factor Rankings :
Public Finance Fiscal Policy Institutional Framework Business Legislation Societal Framework

2008
51 53 35 11 35

2 2 4 5 5

Weaknesses
2.2.07 2.1.02 2.5.04 2.2.11 2.1.07
Effective personal income tax rate Percentage of an income equal to GDP per capita Government budget surplus/deficit Percentage of GDP The risk of political instability is very low (Survey) Employers social security contribution rate Compulsory contribution as a percentage of an income equal to GDP per capita Central government foreign debt Percentage of GDP

55 54 50 49 48

148

IMD WORLD COMPETITIVENESS YEARBOOK 2008

Search

Home

Criteria List

Page Up

Zoom In

Zoom Out

Print

COMPETITIVENESS TRENDS - FACTOR BREAKDOWN

HUNGARY

BUSINESS EFFICIENCY
04 38 05 30 06 33 41 45 07 08 Sub-Factor Rankings :
Productivity & Efficiency Labor Market Finance Management Practices Attitudes and Values

2008
37 31 41 41 55

Strengths
3.2.04 3.1.09 3.2.03 3.2.14 3.3.09
Remuneration of management Total base salary plus bonuses and long-term incentives, US$ Large corporations are efficient by international standards (Survey) Remuneration in services professions Gross annual income including supplements such as bonuses, in US$ Female labor force Percentage of total labor force Banking regulation does not hinder business development (Survey)

9 12 19 19 19

Weaknesses
3.5.05 3.5.04 3.5.01 3.5.06 3.4.09
The need for economic and social reforms is generally well understood (Survey) Flexibility and adaptability of people are high when faced with new challenges (Survey) Attitudes toward globalization are generally positive in your society (Survey) The value system in your society supports competitiveness (Survey) Social responsibility of business leaders is high (Survey)

55 54 53 53 52

INFRASTRUCTURE
04 05 24 27 28 06 07 25 08 Sub-Factor Rankings :
Basic Infrastructure Technological Infrastructure Scientific Infrastructure Health and Environment Education

2008
21 25 39 33 28

27

Strengths
4.5.03 4.2.06 4.1.03 4.4.08 4.2.13
Pupil-teacher ratio (primary education) Ratio of students to teaching staff Communications technology (voice and data) meets business requirements (Survey) Access to water is adequately ensured and managed (Survey) Medical assistance Number of inhabitants per physician and per nurse Information technology skills are readily available (Survey)

2 8 9 11 11

Weaknesses
4.4.19 4.5.17 4.5.15 4.4.04 4.1.16
Sustainable development is a priority in companies (Survey) Language skills are meeting the needs of enterprises (Survey) Economic literacy among the population is generally high (Survey) Health infrastructure meets the needs of society (Survey) Maintenance and development of infrastructure are adequately planned and financed (Survey)

52 48 48 45 41

IMD WORLD COMPETITIVENESS YEARBOOK 2008

149