Foreign direct investment in Hungary has experienced annual growth since its ten-year low point in 2013.

During the three years to 2015, a total of 250 projects were recorded, excluding retail, $7.62bn was invested and 42,596 jobs were created. Project numbers in the country increased by 15.1% from 2013 to 2014 and by another 10.7% from 2014 to 2015. Data from greenfield investment monitor fDi Markets shows that Budapest was the strongest city in the country by far, with a total number of 62 projects, representing a market share of 24.4%.

Advertisement

In joint second place were the cities of Gyor and Szekesfehervar, which secured 10 projects each and held a market share of 4% of total FDI in the country. The top investing source country in terms of project numbers, was Germany, responsible for 62 projects with a market share of 24.8% in the country. In second place was the US, with the creation of 50 projects, representing a 20% market share, followed by Japan and Austria, which created 14 projects and took a market share of 5.6%. 

Sector breakdown

The leading sector, in the three-year timeframe, was automotive components, with 43 projects. Industrial machinery, equipment and tools followed with 20 projects. Third place was shared between metals and software and IT services, with 15 projects each. 

Up to the end of May, so far Hungary has recorded 35 projects in 2016, capital investment of $1.43bn and the creation of 7509 jobs. Even though the number of projects fell by 25.53% compared with the same period in 2015, with 47 recorded projects, there is a fair chance for FDI to pick up throughout the year, continuing the country’s recovery from its low in 2013. 

Although Hungary only came in at sixth place in emerging Europe during the three-year period in terms of project numbers, with a market share of 6.93%, there is potential for long-term recovery in the region.