Hungary Economy

Hungary Economy

In economic terms, the country is divided into three parts. The part with the strongest growth dynamic, in which about half of all foreign direct investments have been realized since 1990, is central Hungary with the capital region Budapest. The regions of western and central Transdanubia in the western part of the country can also boast high-growth development and a favorable economic structure. Most of the rest of the country are characterized by structural weaknesses and economic problems, especially the more agrarian areas of the Great Plain, but also the heavy industrial region around Miskolc in the north-east of the country, which was heavily promoted during the socialist period.

Foreign trade: Hungary’s earlier close ties to the Comecon in terms of trade policy resulted in a priority orientation towards the Comecon states, especially the Soviet Union. Outside the Comecon area, foreign trade was determined by the importation of industrial goods from western industrialized countries in exchange for the delivery of foodstuffs and semi-finished goods. Since 1986, the transfer ruble and bilateral goods quotas have been abandoned in trade with the most important Central and Eastern European trading partners and a free trade area (CEFTA) educated; at the same time the existing trade barriers between Hungary and the western industrialized countries were dismantled (Association Agreement with the EC 1991). With the decline of relations with the markets in the Eastern European, formerly socialist states and the takeover and establishment of companies by foreign investors, there was a rapid reorientation towards Western European markets and rapid integration into the world economy. The volume of foreign trade has increased considerably since the 1990s (import volume 2015: € 83.5 billion; export volume: € 88.9 billion). The main export goods are electronic products, machinery and equipment, vehicles and food. When it comes to imports, electronic products, fuels, machines and chemical products dominate. Germany is the most important trading partner (2015:


In 1989, in addition to agricultural production cooperatives and state goods, there were around 1.4 million small, part-time private businesses (less than 1 hectare) that made a significant contribution to supplying the population with agricultural products. After the political change, agricultural reforms were carried out with the aim of privatizing agriculture. Today, the majority of Hungarian agriculture is dominated by smaller private family businesses, which together manage around 60% of the usable area. The remaining area has larger and more efficient agricultural societies organized in different legal forms, including newly formed cooperatives. Increased production costs, cuts in subsidies, lack of capital, the break in relations with the former sales markets in Central and Eastern Europe, but also the conversion to less effective small-scale farming led to a decline in agricultural production in the 1990s. As a result of the integration into the common agricultural market of the EU in 2004, Hungarian agriculture is under increased competitive pressure, which especially endangers many of the small businesses in their existence.

The agricultural sector, in which around 5% of the workforce was employed in 2014, generated 4.5% of GDP. 59% of the country’s area is used for agriculture, of which around 85% is arable land and 15% is grassland. The main crops grown are wheat, barley, corn, sunflowers, potatoes and sugar beets, as well as special crops such as tomatoes, peppers, onions, fruit (including apples, apricots, peaches, plums) and wine (Hungarian wines). Livestock farming is still important (cattle, pigs), although the number of animals has decreased since the early 1980s. Turkeys, ducks and geese are mainly kept for export.

Forestry: As a country starting with letter H according to Countryaah, Hungary is one of the least forested countries in Europe. The forest cover (2013) only covers 22.8% of the territory; of the 2.1 million hectares, around 14% are coniferous forest.

Fishing: Around 70% of the catch (2012: 21,800 t) comes from fish ponds, the rest mainly from Lake Balaton, Danube and Tisza.

Natural resources

Hungary is a country poor in natural resources. There are deposits of iron, manganese and copper ore and, to a large extent, bauxite. The mining of bauxite in the areas in the Bakony Forest and Vértes Mountains was drastically reduced after the toxic sludge disaster in 2010. Lignite, crude oil and natural gas are produced as energy sources, but they are far from being able to meet domestic demand. Uranium and hard coal mining in the Mecsek Mountains near Pécs was stopped in the 1990s. The large number of thermal and mineral springs are used.

Energy industry

Electricity production reached 34.3 million MWh in 2012, of which the nuclear power plant in Paks had a share of 45.9%, 26.7% of the electricity was generated from natural gas and 18.8% from coal. The use of renewable energies (2014: around 8% of electricity generation) will be further expanded.


The manufacturing industry, which employed 30% of the workforce in 2014, had a share of 31.2% of GDP. Machine and vehicle construction, the food, chemical, electronic and metal processing industries are of particular importance. After the sharp decline in the early 1990s, industrial production has grown significantly again. While many old businesses that were not competitive on the world market fell into disrepair or were shut down in the wake of economic transformation. A large part of the heavy industry has been able to develop a new industrial structure as a result of the privatization and relocation of foreign companies, for example in vehicle construction and in the automotive supply industry in north-west Hungary (e.g. Győr, Esztergom). Not only have simple and labor-intensive production processes been relocated to Hungary,

Service sector

Since the beginning of the 1990s, services have increased their share of GDP generation (2014: 64.4%); 65% of all employed persons were employed in this sector.

Tourism: Within the service sector, tourism is an important source of foreign exchange; the number of foreign guests reached 14.3 million in 2015, plus around 30 million transit travelers. Traditional travel destinations in Hungary are Budapest, Lake Balaton, the Pusz Valley landscapes and the numerous health resorts with their medicinal springs; Other important travel areas are some cities with medieval or baroque city centers (e.g. Sopron, Győr, Pécs, Esztergom, Eger), Lake Velence, the Danube Bend, the Matra, Bükk and Mecsek Mountains.


The rail and road network is comparatively dense and spatially oriented towards the capital. The length of the railways is 7,900 km. The length of the network of national roads is 203,600 km, of which 1,582 km are motorways. The motorway network has roughly doubled its range since 1990, including the motorway between Budapest and Vienna, which is important for economic development, was completed. The Danube and Tisza are the most important shipping routes; the navigable waterway network has a length of 1,600 km. Liszt Ferenc International Airport is located around 16 km southeast of Budapest.

Hungary Economy