Hungary Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

According to preliminary data, in 2021 total exports from Hungary to the EU amounted to 76.6% of total exports, in the case of imports it was 71.2%. Hungary has an active balance in trade with the EU.

  • Allcountrylist: Overview of major industries in Hungary, including mining, construction, transportation, tourism, and foreign trade.
2017 2018 2019 2020 2021
Exports from the EU (million EUR) 70,997 75,086.0 77,425.2 70 118.9 84 217.4
Imports into the EU (million EUR) 80 106.8 84,690.0 88,296.0 81,066.3 91,378.0
Balance with the EU (million EUR) 9,109.6 9,604.0 10,870.8 10,947.4 7 160.6

Source: KSH (Central Statistical Office of HU)

Trade relations with the Czech Republic

Turnover (movement of goods) between the Czech Republic and Hungary reached a value of CZK 279.7 billion in 2021. Last year, Hungary was the Czech Republic’s 9th largest trading partner in terms of exports and turnover (CZK 279.8 billion), and it was the 10th largest partner in imports. The Czech Republic has traditionally had a positive trade balance with Hungary. Among the most important items of export from the Czech Republic to Hungary in 2021 were 1/equipment for telecommunications and for sound recording and reproduction, 2/electrical equipment, instruments and appliances, n.e.c., 3/machines and equipment generally used in industry, n.e.c., 4/ office machines and equipment for automatic data processing, 5/ metal products,.n., 6/ various products, nec, 7/ iron and steel, 8/ essential oils and aromatic substances, polishing and cleaning preparations, 9/ petroleum, petroleum products and related materials, 10/organic chemicals.

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 90.1 132.1 149.1 146.6 163.1
Imports to the Czech Republic (billion CZK) 126.6 96.2 97.7 102.6 116.7
Balance with the Czech Republic (billion CZK) 36.4 -35.9 -51.4 -44.0 -46.4

Source: CZSO

Trade relations with countries outside the EU

Hungary has a negative trade balance with non-EU countries, which is due, among other things, to the import of energy raw materials from non-EU countries.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 21,605.2 24,248.6 27,335, 29,488.9 33 195.1
Imports to countries outside the EU (million EUR) 20,573.2 20 164.6 20,798.6 23,919.8 27,931.3
Balance with non-EU countries (million EUR) -1,032.0 -4,084.0 -6,537.2 -5,569.1 -5,263.8

Source: KSH (Central Statistical Office of HU)

Foreign direct investment

Status of foreign direct investment in Hungary (data from the Central Bank of Hungary):

The total amount of FDI in Hungary was EUR 83,58million in 2020, with more than 86.8% of FDI coming from European countries (1st place Germany = EUR 16,067.3 million, 2nd place Netherlands = 15,718.6 million EUR, 3rd place Austria = 10,09million EUR, the Czech Republic is in 17th place), 8.2% from Asia, 2.1% from Africa and 2.0% from America, etc.

Sectoral structure of total FDI value in 2020 by important sectors: A/agriculture, hunting, forestry = EUR 517.5 million, B/quarrying and quarrying = EUR 281.0 million, C/manufacturing industry total = 37,122, EUR 7 million, D/ Supply of electricity, gas, air conditioning = EUR 997.0 million, E/ Water supply, sewage, waste management = EUR 70.2 million, F/ Construction = EUR 96million, G /services in total = EUR 38,27million.

In Hungary, there is a system of investment incentives implemented by the HIPA agency. In 2018, a law was promulgated regarding the control of foreign investments that violate the security interests of Hungary. For Czech investors, Hungary can be interesting due to a combination of several factors such as the system of investment incentives, the geographical proximity of the Czech Republic, an extensive highway network, or the proximity of Southeastern Europe.

Czech investments in Hungary (according to data from the Czech National Bank):

According to CNB data, as of 31.12. 2020 direct investment from the Czech Republic to HU totaling EUR 36million. A number of Czech companies have invested in Hungary in the past, such as the PPF Group, Škoda Transportation, Ravak, Alza, CPI Property Group, and Škoda Transportation. Some companies such as Agrofert, Alukov or Cerva Group have also invested in production plants here. The Nymwag CS company is now planning to build a large plant for the production of railway wagons in Hungary.

FTAs and treaties

Contracts with the Czech Republic

Both Hungary and the Czech Republic are member countries of the European Union, and a large part of their mutual relations is regulated by EU legal norms. Within the framework of the bilateral contractual basis, the following agreements are the main standards in the economic field: a/Treaty on the prevention of double taxation and the prevention of tax evasion in the field of income and property taxes, signed in Prague on 14 January 1993 (after national ratification procedures, it entered into force on 27 12/1994) and/Agreement on the support and mutual protection of investments signed in Prague on 1/14/1993 (entered into force on 5/25/1995 after national ratification procedures). Following the obligation of EU member states to bring international legal obligations into line with EU law, the process of terminating the validity of this bilateral agreement and replacing it with EU legislation is underway.

You can find more information about the existing bilateral contractual basis on the website of the Ministry of Foreign Relations of the Czech Republic in the Foreign Relations section and the International Agreements section.

Developmental cooperation

Development aid between the Czech Republic and Hungary is neither provided nor received mutually. Both countries are donors of development aid, therefore the possibilities of cooperation exist only in third markets that are recipients of development aid.

Development aid in Hungary is in charge of the Ministry of Foreign Affairs and Trade, specifically the Department for International Development. This department also developed the Hungarian strategy for international development cooperation for the years 2020-2025, a summary of which can be found here. The contact e-mail for any questions is: [email protected]

Prospective fields of study (MOP)

Energy industry

Hungary is counting on the development of nuclear energy, which brings with it opportunities for direct cooperation with the Hungarian side in the field of supply of engineering services, as well as opportunities to participate in the project through subcontracting for selected suppliers. The planned conversion of a large lignite power plant in Mátra is also an opportunity for Czech engineering companies. In general, the great development of Hungarian solar energy is also an opportunity for Czech suppliers of solar solutions, which, however, currently faces the issue of capacity for connecting new sources to the grid.

Defense industry

An ambitious military modernization program called “Zrínyi 2026” is underway in Hungary. The subject of interest from the Hungarian side is a wide range of products from the defense industry. At the same time, new armories are being built, which brings opportunities for engineering companies from the defense industry.

Healthcare and pharmaceutical industry

The Hungarian government plans to build a large hospital on the southern outskirts of Budapest with a capacity of up to 1,200 beds, which should be able to provide services for approximately million inhabitants. Along with this, there is the development of private health facilities, including private hospitals with operating rooms. The project of a national plant for the production of vaccines is also being implemented.

Transport industry and infrastructure

Within Hungarian cities, the vehicle fleet is being modernized, new ecological buses are in demand, but the modernization also concerns the fleet of trolleybuses and trams. Modernization of airports is planned. In the east of Hungary, the transshipment infrastructure from the broad-gauge line near the border with Ukraine is also being modernized.

ICT

Interest in so-called smart city technologies is growing in Hungary. Cities are gradually developing smart city strategies or are already implementing specific investments. However, there are also opportunities for the use of smart city technologies, for example, in energy (network management, etc.). Developments associated with the pandemic have also shown great opportunities in the online sales sector.

Construction industry

There is the construction of new buildings, as well as the reconstruction of old monuments, both in Budapest and throughout Hungary. There are also large construction projects, such as the construction of the national athletics stadium. There are also great opportunities in the area of ​​modernizing residential interiors – e.g. supplies of bathroom equipment, etc.

Agricultural and food industry

Opportunities lie e.g. in the segment of processed foods, where, in addition to traditional Czech export commodities such as Czech beer, there are also foods focused on higher added value. New opportunities are also opening up in the field of online sales and in the field of food technology for newly built processing plants.

Hungary Trade