industrial

Bad news from Hungary’s economy: construction, industry fall

Construction industry

Output of Hungary’s construction sector dropped by 3.8 percent year on year in June, the Central Statistical Office (KSH) said on Tuesday. Meanwhile, industrial output in Hungary fell by an annual 3.8 percent in June after dropping 6.7 percent in the previous month, the Central Statistical Office (KSH) said on Tuesday. 

Output of the buildings segment rose by 7.5 percent, while civil engineering output dropped by 20.5 percent. In absolute terms, construction sector output was worth 629.8 billion forints in June. Month on month, output fell by 1.4 percent, adjusted for seasonal and working-day effects. Construction output fell by 7 percent in January-June from the base period.

Hungary industrial output in June falls 3.8 pc

Industrial output in Hungary fell by an annual 3.8 percent in June after dropping 6.7 percent in the previous month, the Central Statistical Office (KSH) said on Tuesday. Output dropped by 6.1 percent, adjusted for the number of working days. Output of the automotive industry, Hungary’s biggest manufacturing sector, rose by 19.1 percent year on year, picking up from 10.8 percent growth in the previous month, the detailed KSH data shows.

The electrical equipment segment grew by 16.9 percent, while output of the food, drinks and tobacco segment slipped by 11.1 percent. Month on month, output fell by 0.9 percent, according to seasonally and working day-adjusted data. In the January-June period, output dropped by an annual 4.8 percent.

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The Hungarian ministry wants to save Dunaferr

Dunaferr vasmű dunaújváros

Troubled steelmaker Dunaferr’s operations and efforts to protect jobs at the plant were the subject of discussion between the chief executive of the company’s owner, Liberty Steel Group, and the minister of economic development on Wednesday.

The government and Liberty Steel are cooperating closely on ensuring the stable operation and development of Dunaferr, the ministry said in a statement after Márton Nagy’s talks with Sanjeev Gupta.

Gupta said Liberty was committed to transitioning to green steel on which the sector’s future depended.

The ministry has taken an active role in rescuing the steelmaker after it went bankrupt on the back of poor foreign management and failed sanctions, the statement said. After an open and transparent liquidation procedure, Liberty Steel submitted its winning tender, it added.

Nagy said the sale was “an important milestone”, but the hard work had only just begun, according to the statement on the meeting in Nagy’s office.

The transition to green steel and other industries has the government‘s full support and the ministry will do everything possible to resolve the situation of Dunaferr in the long term in order to protect jobs and families dependent on the plant in Dunaújvaáros, it added.

Hungary and Japan sign close nuclear cooperation agreement

péter szijjártó Yoshimasa Hayashi

Hungary and Japan have sealed an agreement on nuclear industrial cooperation aimed at ensuring that nuclear energy remains a key part of both countries’ energy policies, Péter Szijjártó, the minister of foreign affairs and trade, announced in Tokyo on Wednesday.

The purpose of the deal is to ensure both countries continue to enjoy “cheap, safe and environmentally friendly” energy production, he said after talks with the Japanese minister of economy, agriculture and foreign affairs. Péter Szijjártó also called for “rational international discussions on nuclear energy based on common sense, free from “ideological, emotional attacks” against the nuclear industry.

Szijjártó and his counterpart Yoshimasa Hayashi:

Meanwhile, the minister said Hungary supports NATO cooperation with countries of the Pacific region as well as closer NATO-Japan ties. He noted that he met leaders of several companies and the Japan Business Association (Keidanren). Japanese companies are the seventh largest investors in Hungary, he added.

Japanese companies in the food, car and electronics industries have highly praised operating conditions in Hungary, and they are planning more and more investments, he said. Hungarian exports to Japan were worth a record USD 940 million last year, he noted, adding that a 30 percent annual increase is expected this year.

Japan is a key destination for Hungarian food industry exports, he said, highlighting exports of peas, sunflowers, duck meat and foie gras. Szijjártó referred to an existing agreement that exports will only be banned from the affected areas in the case of an outbreak of animal viruses, adding that poultry and pork exports would become far more flexible in the coming period.

Bilateral relations, he said, were problem-free, and economic ties therefore were developing smoothly. Hungary will soon open a consular mission in Osaka, he noted. The minister said Japanese credit rating agencies, unlike their Western peers, portrayed the Hungarian economy factually and fairly and did not use ratings for political purposes.

Arable land prices up by almost 10 pc last year in Hungary

Harvester Agriculture Kombájn Combine Agrár

Arable land prices in Hungary went up by nearly 10 percent in 2022, an increase higher than in the previous years, MBH Bank said on Thursday.

The average price of arable land per hectare went up by 7.4 percent, below the rate of inflation, the bank said in a statement. The average price of one hectare of arable land was HUF 1.94 million  (EUR 5,100) last year, it said.

In a breakdown of regions, the price increase was highest, 18 percent, in northern Hungary.

The price per hectare of arable land was highest, at some HUF 3 million, in the area of Hajdúszoboszló and Hajdúböszörmény, in the east.

In a breakdown of industry segment, per hectare prices were highest, HUF 2.21 million  for orchards, followed by 2.05 million per hectare for vineyards.

The bank noted that under a state scheme, 12.000 hectares of arable land worth several tens of billions of forints were put up for auction between June 22 and July 14. In a further round, an additional 10,000 hectares will be auctioned off, it said.

Miskolc, Hungary completes EUR 5 million industrial park update

miskolc industrial park

The municipal council of Miskolc, in north-eastern Hungary, has completed a HUF 2 billion (EUR 5.1 million) upgrade of its industrial park, the council told MTI on Monday.

The project involved water and road infrastructure and received European Union support and state funding, it said in a statement. At present, 19 companies operate in the 93.5-hectare park located near motorway M30 and the Budapest-Miskolc major rail line.

Miskolc Holding Zrt. has further developed the infrastructure of its industrial park in order to ensure that the county seat remains an attractive destination for investment, the local government of the town told MTI.

The aim of the investment was to create an industrial park with adequate basic infrastructure and good transport links in line with investor needs, Magyar Építők reports.

Hungary to buy modular nuclear reactor in a few years

small nuclear modular reactor

Hungary could consider the purchase of one or more small modular reactors (SMR), a class of nuclear reactor that is smaller than conventional ones and can be remotely produced, in 2029-2030, the minister of energy affairs said in an interview published on business news website vg.hu on Monday.

An SMR could be procured by Hungary in 2029-2030 “at the earliest”, Csaba Lantos said. The SMR would probably be set up in the east of the country, but other locations are also being considered, he added.

He acknowledged that Hungary depends on imports for 76 percent of its energy supply, above the EU average of 71 percent, but said the government had done much to establish interconnectors between networks of neighbouring countries.

Hungary has to expand its sources of supply, but it cannot give up imports from Russia “from one day to the next”, the minister said.

Lantos said he would like to see the lifespans of all four blocks at the Paks nuclear power plant extended for another 20 years, adding that the matter hinges on technical rather than political issues.

The four existing blocks at Paks are set to end their runs between 2032 and 2037. When two additional blocks are completed at the plant, capacity of Paks will reach 4,400 megawatts.

Hungary’s solar capacity is expected to reach 10-12 gigawatts by 2030, he said.

Asked when additional wind plants could be built in Hungary, he said the matter of the scale and location of wind turbines is one of debate with the EU. “We don’t want Hungary to be turned into an industrial landscape,” he added.

He said lignite-fueled blocks at the Matra power plant, in northern Hungary, would continue to operate “as long as necessary”, until three new gas-fueled blocks are built.

Featured image: illustration (PrtSc/YouTube/NuScale Power)

Food to get more expensive due to new regulation in Hungary

shopping consumption

The new Extended Producer Responsibility (EPR) could lead to food prices rising in Hungary by up to 4 percent from July.

Extended Producer Responsibility to change the prices of products

The new Extended Producer Responsibility (EPR), a charge on packaging materials, could lead to food prices rising by up to 4 percent from July, Agrárszektor reports. The new burden is several times the previous product charge, totalling around 60 percent of the food industry’s 2021 profits. That is a cost increase of EUR 120 billion to the sector, which it will definitely try to pass on.

Under the extended producer responsibility (EPR) system, users of packaging materials must pay a concession company, MOHU MOL Hullgazdálkodási Zrt., a member of the Mol Group, for the amount used, the portal reports.

The question, according to the portal, is to what extent which operators can raise their transfer prices in view of the EPR. While there is no doubt that no processor is in a position to absorb such a large burden given the overall economic climate, it is expected that the more capital-strong processors with better bargaining power will have greater success in this regard.

It is expected that smaller players, food processors in the Hungarian SME sector, will be the ones who will not or only partially be able to incorporate the cost increase of packaging into their selling prices, Attila Vörös, executive director of the Association of Responsible Food Producers (FÉSZ), told the newsportal.

Huge price increases to come in the industry

According to the industry’s calculations so far, a few items illustrate well the scale of the burden. For example, the price of the well-known 720-millilitre jar, including lid and label, has been HUF 5 so far. From July, it will rise to HUF 30.

For different types of packaging materials, the future charges will be three and sometimes ten times higher than in the past. Generally speaking, for most materials, multipliers of five to six will soon be in place.

Given the current situation, the significant cost increase and the uncertainties, the industry wants the ministry to delay the introduction of the new system until a compromise can be reached in the talks between the industry and the ministry.

As we reported yesterday, a major supermarket chain just announced the price cut of 85 of their products. Read details HERE.

Featured image: illustration

Rolls-Royce makes another huge R+D investment in Hungary

rolls royce hungary

Industrial technology company Rolls-Royce is investing 6.9 billion forints (EUR 18.6m) in a research and development project in Hungary, Péter Szijjártó, the minister of foreign affairs and trade, said on Monday.

Rolls-Royce will plan the equipment for the future of transportation at its base in Budapest, including parts for hybrid and electric aircraft and systems based on high-speed generators, Szijjártó said.

The state is providing support of around 1.7 billion forints for the investment, which will create 20 jobs for engineers, he added.

British companies have invested around 6 billion forints in Hungary and provided jobs for over 50,000 people, he noted.

Japan’s DENSO invests 67.9 million euros to expand capacity in Hungary

denso

Japanese automotive industry supplier DENSO will spend 25 billion forints (EUR 67.9m) on capacity expansion at its base in Székesfehérvár, in central Hungary, creating 55 jobs, Péter Szijjártó, the minister of foreign affairs and trade, said on Monday.

The DENSO‘s investment, which will establish a new division specialising in the production of electric and hybrid vehicle parts, is supported by a 3.6 billion forint government grant, Szijjártó said, according to a ministry statement. The government grant will also support the retraining of 135 people, he added.

The investments currently being made in Hungary will make the country the European leader in the production of electric vehicle batteries, Szijjártó said. This will make Hungary an essential player “in this strategically important industry”, guaranteeing its sustained growth, he added.

The recent global economic challenges have failed to slow the “irreversible and long-term revolutionary transformation” of the auto industry, the minister said.

The emergence of the electric vehicle industry has created intense competition, he said, adding that countries capable of attracting EV investments would be the ones to achieve sustainable growth.

Hungary’s government has been successful in this endeavour so far, Szijjártó said, highlighting the role of the strategy of opening up to the East, noting that a significant share of the industry’s investments came from Asia.

As we wrote in May, China is investing 3 billion euros in Hungary’s automotive industry in the coming period, details HERE.

You can read an interview with Japan’s ambassador to Hungary on mutual relations, Bartók-Kodály-Liszt music, North Korea and more, read HERE

Huge downturn in Hungarian industry: the weakest month in three years

hungarian industry production economy

Export-producing industries did well, but everything else did very poorly. Output of Hungary’s industrial sector fell by 8.3 percent year-on-year in April, after a 4.1 drop in the previous month, data released by the Central Statistical Office (KSH) on Wednesday show.

April output dropped by 5.8 percent when adjusted for the number of workdays. Month on month, output declined a seasonally and workday-adjusted 2.5 percent, MTI reports.

The last time a worse drop was recorded was in May 2020, when the first wave of the pandemic saw a mass shutdown of factories. Obviously, the 30 percent drop then is nothing compared to the drop now. However, it says a lot about the situation that in the three years since then, there hasn’t been a month as bad as this one, hvg.hu writes.

The performance was so poor despite the fact that the two most important sub-sectors (vehicle manufacturing and electrical equipment manufacturing, including batteries) managed to grow. Almost all other sectors, however, performed worse than a year ago, according to the data of KSH. This means that what can be sold abroad is still being produced in good quantities in Hungary, but weak domestic consumption is causing serious problems, hvg.hu explains.

Production in the first four months of the year was 4.3 percent lower than in the same period in 2022.

What are the growing economies in Hungary?

Hungary Budapest Parliament Danube Buda Castle

Lying in the landlocked region of central Europe, Hungary is famous for its historic architecture, world-class festivals held in the capital of Budapest, flourishing manufacturing industry, and famous inventions including the Rubik’s Cube and Microsoft Word and Excel, and the ballpoint pen.

However, despite these interesting facts that would make an excellent general knowledge quiz, Hungary is not playing any games when it comes to the development and expansion of their economy. As the 53rd largest economy in the world, Hungary has an annual output of  $265.037 billion, as well as a very high Human Development Index and a highly skilled labour force.

Are you wondering how Hungary is so successful? Below, we will take a look at the top-growing economies in Hungary in 2023.

Automotive

audi
Source: AUDI

The automotive sector is a critical component of Hungary’s economy and accounts for 21% of all exports. There are more than 600 automotive companies in the country, of which they employ more than 100,000 people. Four of the world’s top automotive manufacturers have production facilities in Hungary, including Suzuki, Audi, Opel, and Daimler. In addition, serial production of Mercedes-Benz also began in the country in 2021.

In addition, automotive giant Audi has their second largest engine plant in the country, creating a stronghold for one of the world’s most successful car manufacturers.

iGaming

While the iGaming industry in Hungary cannot be compared to gaming giants like China or the US, the central European country has been making rapid progress in the iGaming industry in recent years. The total revenue of the global video gaming market in 2020 was valued at $25 million, of which 36% of this was generated in Hungary.

This figure is expected to rapidly rise even more in the years to come as classic casino providers provide poker games, blackjack, bingo, slots, baccarat and so much more within easy reach of consumers. One of the great things about iGaming is that they can be accessed so easily by the population, from anytime of day and in practically any location with wifi.

Electronics

Hungary is known for having a large industrial presence, in which their electronics productions account for 22% of total Hungarian manufacturing production. In fact, Hungary is the largest electronics producer in the whole CEE region and is home to six out of the 10 top electronic manufacturing services in Europe. These six providers include Jabil, Flextronics, Foxconn, Sanmina, Zollner and Videoton. These companies also conduct R&D activities which impact upon the success of many other industries across the globe.

IT

Having been known as the home of the creators of Microsoft Word and Excel, Hungary has long been on the map when it comes to their IT skills. The IT sector accounts for 10% of Hungary’s total GDP and employs over 100,000 people. The IT industry continues to grow rapidly in Hungary currently, with a lot of resources being channelled into computer assembly and communications equipment manufacturing.

There is also a huge amount of activity relating to R&D in the IT sector. Much of the R&D work focuses on software development including process control software, game programs and geographical information technology, focusing on navigation systems.

Some of the leading IT companies in Hungary include Ericsson, Oracle and Gameloft and Nokia.

Pharmaceuticals

The pharmaceutical industry is ingrained into Hungary’s economy and is renowned across the world for its rigour and success. In fact, Hungary is known for having the most developed pharmaceutical and biotechnology sectors in Central and Eastern Europe, providing the ideal base for life science companies.

Statistics show that in 2011, pharmaceutical exports reached USD 3.93 billion, with this figure being much larger today. The majority of pharmaceutical companies in Hungary are located around 4 major hubs, including Budapest, Debrecen, Szeged and Pécs.

Food industry

While it may not be as big as it used to be, the food processing industry in Hungary is nevertheless a key component of their economy. Hungary is the only net exporter of agricultural and food products in the CEE region and the industry accounts for 6% of their total exports.

Many of the food production companies in Hungary are classed as micro-businesses, employing fewer than 10 members of staff. The majority of these food processing businesses deal with meat, coffee, tea, and the manufacturing of soft drinks.

There is also a great deal of activity around the processing of vegetable oil, confectionery and snacks, of which many are owned by foreign investors. Data shows that foreign investors use many of Hungary’s raw components in their production.

Overall, Hungary is a very economically developed country in central Europe, in which their activity relating to manufacturing and R&D is essential to the global economy. The software and electronics industries are of most prominence, with igaming software being of significant importance. From what we can see, Hungary’s economy is set to thrive across 2023.

Breaking news! China is investing 3 billion euros in Hungary’s automotive industry in the coming period

china hungary

China is investing 3 billion euros in Hungary’s automotive industry in the coming period, Péter Szijjártó, the minister of foreign affairs and trade, said after talks with Minister of Commerce Wang Wentao in Beijing on Monday. This will further strengthen Hungary’s position as a top investment destination in central Europe, he added.

Szijjártó had talks with the chief executives of five major Chinese companies, four of which will implement investments in Hungary’s electric car industry which supplies German manufacturers, according to a foreign ministry statement.

The new investments will make a significant contribution to Hungary’s ability to maintain its economic growth, the minister said, adding that

the projects would be implemented in the interest of renewing Europe’s automotive industry and meeting the demands of German manufacturers.

Chinese companies, he said, consider the country a top destination for their investments in central Europe, noting that by the end of 2022, Hungary had the largest volume of Chinese investments in the region. “We want to continue maintaining this trend … so we’ll encourage additional investments from China, giving them the maximum possible support,” he said.

In the context of the war in Ukraine, Szijjártó said that among the most negative consequences of the war was the re-emergence of blocs in the world which, he added, went against Hungary’s interests. “We want connections, not blocs, to be a basis on which the world operates in the coming period … We think that China’s global initiatives serve to achieve this goal, so we support these,” Szijjártó said, emphasising the need to build EU-China cooperation based on mutual trust and benefits.

“We do not agree with the position that brands China as a threat. Our position is that there are enormous opportunities in cooperation with China as a partner.”

“For this reason, we’d like to develop steady cooperation between the EU and China, and placing Chinese companies on a list of EU sanctions or introducing restrictions on their exports would be insupportable,” Szijjártó said.

He noted that in 2022 China’s GDP expanded to a new record, exceeding the total GPD of the European Union, while it created 12 million urban jobs within a single year.

“These results indicate that Europe can only benefit from cooperation with China, and this is why we are urging strong cooperation built on mutual respect,” the Hungarian foreign minister said.

As we wrote today, government wants to rely on China’s Huawei for digitalisation, says minister in Beijing.

Szijjártó: CATL battery plant encourages further Chinese investment in Hungary

The building of the battery plant by China’s CATL in Debrecen, in eastern Hungary, is already stimulating other Chinese investments in the country, too, Minister Szijjártó said in Beijing on Monday.

This is helping to boost Hungary’s competitiveness within Europe, given that Chinese investments bring the most cutting-edge technology to their new bases, Szijjarto said ahead of a working dinner with CATL CEO Robin Zeng.

Moreover, investments in the electric vehicle industry ensure that Hungary remains a leader in the fight against climate change, according to a ministry statement quoting the minister.

“This is something everyone who feels a responsibility for the environment can be proud of,” Szijjarto said. He noted that 14 percent of global harmful emissions are linked to public road transport, adding that all green and climate goals would remain “a naive illusion” without the transition to electric vehicles.

The minister said competition for Chinese investments in Europe remained fierce.

“It’s clear that besides the competitiveness of Hungary’s investment environment, the excellent political relations between Hungary and China also play a major role in us winning these investment bids over much stronger western countries.” Szijjarto said.

Hungary, China can count on each other on increasing “voice of the peace camp”

Hungary and China can count on each other in “increasing the voice of the peace camp” and the two countries closely cooperate towards achieving a ceasefire in Ukraine as soon as possible and the start of peace talks, Minister Szijjártó, said after meeting Qin Gang, his Chinese counterpart, in Beijing on Monday.

The armed conflict in a neighbouring country poses particularly serious challenges to Hungary which is why Hungary “is arguing for peace” and wants the fighting to end as soon as possible, the ministry quoted Szijjártó as saying.

“Unfortunately, the war rhetoric is extremely strong globally, particularly in the Trans-Atlantic world,” he said, adding that “therefore we need to constantly increase the voice of the peace camp” to make it clear that the global majority support peace. Szijjarto said that Hungary “does attach a due significance to the role of the People’s Republic of China” in increasing the voice of the peace camp and appreciates the efforts China had recently taken towards peace. “We highly appreciate the peace plan China has put forward,” the Hungarian foreign minister said. He welcomed the existence of such a plan in itself, arguing that when it comes to Ukraine, generally everybody talks only about war.

Szijjártó said he agreed with his colleague to closely cooperate in “amplifying the voice of the peace camp”.

The foreign minister met on Monday China’s minister of commerce for talks as well as a number of corporate executives in Beijing before travelling on to Ningbo for the China CEEC Expo.

Hungarian-owned weapons company to arm rising Asian power

Hungarians weapons factory Asia

Czech Prime Minister Petr Fiala paid a visit to Vietnam last week. He arrived in the capital city of Hanoi with a business delegation of 15 companies. Four of these operate in the weapons industry.

One of the four companies is Aero Vodochody. Previously in 2021, Vietnam bought a dozen of L-39NG light combat aircrafts, produced by the firm. The shipment of the planes starts now in 2023. Why does it bear importance? Aero Vodochody is majority-owned by the Hungarian HSC Aerojet, which is in the hands of the Hungarian state, Portfolio explains.

Czech-Vietnamese weapon ties

Prague is the European Union’s main provider of weapons to Hanoi. The Czech arms industry is known to specialise in the modification and modernisation of old Soviet weaponry. They also produce such weapons, which are compatible with old Russian equipment. Considering that 80 percent of Vietnam’s arms stockpiles consist of old Russian/Soviet military gear, arms deals with Czechia seem like the perfect way to renew their weaponry.

The Czech company Omnipol is also part of the delegation. They are minority holders in Aero Vodochody, and owners of Aircraft Industries, which makes the L 410 NG, a twin-engine 19-seat aircraft. Vietnam may end up buying some of these cargo planes, along with radars and other Czech-made military equipment.

Hungarian ownership ties

Aero Vodochody was the largest Czech aircraft-producing company. HSC Aerojet bought the shares of the firm back in August 2021. At that time, Aerojet was in the ownership of current Defense Minister Kristóf Szalay-Bobrovniczky. To conduct the purchase, the firm had to procure a loan of around 140 million euros, which Szalay-Bobrovniczky received from the Hungarian Development Bank, a state-owned financial institution.

After Szalay-Bobrovniczky was appointed minister, he sold his shares in Aerojet to Zsolt Hernádi, the CEO of the government-affiliated Hungarian oil and gas company, MOL. Later in October 2022 Hernádi transferred these to the N7 Holding National Defence Industrial Innovation Ltd (N7 Holding Nemzeti Védelmi Ipari Innovációs Zrt). This governmental holding is a conglomerate of different national defense industry firms.

In Spring 2022 the government ordered 12 of the L-39NG aircrafts for the Hungarian army. According to estimations, the deal may have cost up to HUF 60-70 billion (EUR 160 million-186 million).

In a nutshell, the Hungarian government granted a loan to a government-affiliated businessman to buy an aircraft company. Once Szalay-Bobrovniczky was appointed minister, he sold the rights to the company to another government-affiliated businessman, from whom then the government purchased it.

Read also:

Mercedes to double production area in Western Hungary

Mercedes car Kecskemét

Mercedes-Benz’s Hungarian plant will become one of the most significant units of the concern following an upgrade doubling production area in Kecskemét, in central Hungary, Péter Szijjártó, the minister of foreign affairs and trade, said on Thursday.

The investment will create large numbers of jobs at the plant, where production of electric models will start next year, the foreign ministry cited the minister as saying.

Szijjártó visited Mercedes-Benz Manufacturing Hungary’s new production hall under construction in Kecskemét and presented managing director Christian Wolff with the Officer’s Cross of the Hungarian Order of Merit in recognition of his work promoting the growth of Hungary’s vehicle industry.

He said the electric car industry would clearly be the future backbone of the European economy, and Mercedes, one of its flagships, had placed Hungary in the focus of its electromobility strategy. The countries that can attract the most electric car industry investments will grow the fastest and most dynamically, he added.

Szijjártó said that Mercedes’ expanding Hungarian production capacity contributed to a large extent to “Hungary becoming one of the centres of Europe’s electric car industry, perhaps even the most significant one.”

“New production halls are being built, where the new bodywork and new assembly lines will be installed,” the minister said. “Thanks to these developments, manufacturing of the new electric models will start next year and large numbers of new jobs will be created,” he added.

Read also:

With the major investment announced last year, Mercedes, which employs close to 5,000 people in Hungary, will bring higher-end models with higher value added to the country, Szijjártó said.

Szijjártó noted that Hungary’s automotive industry, which employs 150,000 people, had output of more than HUF 12,000 billion (EUR 32.0bn) last year and 90 percent of the sector’s output is exported. So far this year, the sector’s output has grown by 40 percent, he added.

He added that German companies continue to form the largest group of foreign investors in Hungary.

Hungarian Foreign Minister rejects ideologies when it comes to economic policy

China leading communist official

Cutting trade cooperation between the European Union and China for ideological reasons would only deepen the economic crisis, Péter Szijjártó, Hungary’s minister of foreign affairs and trade, said in Paris on Monday, underlining the need to maintain pragmatic relations.

Whether or not Europe can overcome the current period of serious challenges will mainly depend on whether decision-makers will be capable of “acting on the basis of common sense”, Szijjártó said after meeting OECD Secretary General Mathias Cormann.

If decisions on economic policy remain ideologically driven then the world and Europe will not be able to overcome the challenges, the minister said. “Common sense is needed to put the global economic crisis behind us,” he added.

Szijjártó welcomed that the OECD and its secretary general “are one of the few organisations and leaders in the world that aren’t trapped by ideology” but instead pursue “rational and realistic economic policies based on common sense”.

He said recovery from the current crisis would depend greatly on whether or not “the ideological approach aimed at cutting cooperation between the EU and China will be successful”.

If economic and trade cooperation is cut at the initiative of western Europe or the United States, “the European economy will be in even bigger trouble, and not only will it not be able to recover, but it will fall even deeper into recession,” Szijjártó said.

Europe has a fundamental interest in maintaining pragmatic and mutually beneficial economic cooperation with China, he added.

This is also made clear by the example of Hungary, he said, arguing that the country was a meeting point for the German auto industry and Chinese electric battery manufacturers. He added that the EU’s “political decision” that all new vehicles sold in the bloc would have to be electric by 2035 meant that the continent needed enough batteries.

Of the ten largest battery manufacturers in the world, 7 are Chinese and 3 South Korean, Szijjártó said. This, he added, made it obvious that if Europe were to cut cooperation with the East, the European auto industry and its electromobility strategy would fail, jeopardising millions of jobs.

Hungary in recent years has regularly seen new investment records, Szijjártó said, adding this was critical to protecting jobs.

“The reason why we’ve been able to constantly set new investment records is because Hungary is an excellent meeting point for Eastern and Western businesses,” he said.

Meanwhile, Szijjártó said his meeting with Cormann had also touched on the fight against inflation, which, he added, “isn’t helped by Brussels’s sanctions”. They also discussed the potential future expansion of the OECD as well as the organisation’s upcoming report on Hungary, he said.

Szijjártó said cooperation between Hungary and the OECD was beneficial and based on mutual respect. The OECD represents the approach which says economic decisions must be based on common sense, “otherwise it will be very difficult to recover from the global economic crisis”, the minister said.

szijjártó wang
Read alsoMinister: Hungary owes gratitude to China

These are the most liveable cities in Hungary

veszprém city

In one of their latest surveys, the Hungarian Central Statistical Office (KSH) investigated which cities in Hungary are the most liveable. Esztergom, GyÅ‘r, Szeged, Tatabánya and Veszprém were in the best, while Salgótarján and Szekszárd were in the worst condition. 

There has been a great deal of research on the measurability of smart cities in the past, but few comprehensive studies have specifically addressed Hungarian cities. Now, Hungarian Central Statistical Office (KSH) investigated which cities in Hungary are the most liveable in terms of economic and environmental sustainability. For this, the UN development indicators were used.

Mitigating global climate change and reducing its negative impacts on the environment has become one of the biggest challenges for cities.

“United Nations Environment Programme (UNEP 2018) estimates that the use of raw materials associated with cities will increase by 40 billion tonnes in 2010 to 90 billion tonnes in 2050.”

The spread of views on sustainability is also seen as increasingly important by policy makers. This is also reflected in the UN’s Sustainable Development Goal (SDG) 11. In Hungary, the SDG survey has so far been carried out on a county level, under the supervision of the KSH. The institute has now examined the performance of Hungarian cities with county status in some of the SDG Index’s priority components. It is important to underline that the analysis of the SDG indices for both European and US cities has highlighted the problems of data availability and comparability.

Increasingly important factors

The three main areas of environmental, social and economic structures are reflected in the SDG Index. These are crucial for the development of cities. The former is about the environment, the second one is about equity, well-being and meeting basic human needs. Meanwhile, the economic part takes into account the economic competitiveness of urban areas.

One part of the research looked at the economic performance of the cities in the county. Here, the number of job seekers, net income per capita, number of businesses, employment rate, and dependency rate of the elderly population were taken into account. Based on the economic scores, Esztergom, Győr, Szeged, Tatabánya and Veszprém were in the best position, while Salgótarján and Szekszárd were in the worst position. However, there is a wide variation in the results, with a difference of HUF 600-700,000 (EUR 1,572-1,834) in average per capita net income between the best and worst placed Székesfehérvár and Baja/Sopron, for example.

In Salgótarján, the proportion of unemployed people who have been unemployed for more than 180 days is high. But it is more than 10 percent which points higher than even Nagykanizsa, the second worst performer. Győr is above average in terms of industrial data, innovation and infrastructure. In terms of sustainability and community aspects, Érd, Esztergom and Veszprém have the most balanced performance. Salgótarján and Nyíregyháza have the most negative indicators. In the latter, fine dust concentration is higher than average.

The difficulty of comparing data from Hungarian cities

Due to the difficulty of comparing data, groups are identified in the following way below. In each cell, the status of the target reach is indicated by blue squares.

KSH statistics SDG sustainabily index
Photo: KSH

The data shows that by far the best ranking was achieved by two cities, GyÅ‘r and Veszprém. The former is now the most dynamic and innovative city in the county, partly because of the Audi Hungaria factory, Index.hu reports. R&D has always had its foundations linked to the University of Pannonia, according to the KSH researchers on Veszprém. The university remains a key contributor to the city’s scientific activity.

The loser among the most liveable cities in Hungary is Salgótarján, as it is the worst performer in the three SDG targets examined. “We can conclude that one of the former “socialist” flagships has become a city abandoned by industry. Its development has not been accompanied by new elements of urbanisation functionality, thus it has become a runner-up among the cities with county status,” the research concludes.

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Government wants to reindustrialise Hungary

The Hungarian government has launched several programmes to counter the negative effects of global challenges on the economy which could also benefit German-owned companies in Hungary, the economic development minister said at an event organised by the German-Hungarian Chamber of Industry and Commerce (DUIHK) on Wednesday.

Márton Nagy noted that the government had launched the 700 billion forint (EUR 1.84bn) Baross Gábor Reindustrialisation Credit Programme, which gives businesses access to cheap investment and working capital loans. He augured tightening competition for foreign direct investment and said the government needed to maintain existing economic support programmes, while coming up with new ones, too.

The government is drafting a scheme to boost investment activity with the purchase of privately-owned companies, the recapitalisation of existing capacities and the establishment of new businesses, Nagy said. The details of the scheme, dubbed Baross Gabor Capital Programme, will be revealed “within a few weeks”, he added. The minister noted that Hungary had attracted 10 billion euros worth of FDI last year, “even in the face of all kinds of difficulty”.

Nagy said analysts expected Germany to avoid a recession, adding that even if the German economy stagnated this year, that translated as growth of 2 percent for Hungary. He said the government was consulting on a regular basis with industry insiders on what they needed to advance further and had held talks with representatives of pharmaceutical companies already, to be followed by meetings with representatives from the insurance, automotive and shared services sectors.

Hungary’s construction sector output down, industrial output up

construction

Here are the latest data from Central Statistical Office (KSH): 

Construction sector output down by 3.9 pc in Dec

Output of Hungary’s construction sector fell by an annual 3.9 percent in December, after rising by 7.6 percent in the previous month, KSH said on Monday.

Output of the buildings segment edged up by 1.1 percent, but civil engineering output slipped by 12.7 percent.

In absolute terms, the sector’s output was at 843 billion forints (EUR 2.2bn) in December. The buildings segment accounted for 68 percent of the total.

Hungary industrial output up 2.0 pc yr/yr in Dec

Hungarian industrial output increased by an annual 2.0 percent in December, up from 0.6 percent in November, KSH confirmed on Monday in a detailed reading of data.

Output of the automotive industry grew by an annual 34.5 percent, albeit from a low base, and up from 23.7 percent in the previous month.

Output of the computer, electronics and optical equipment segment dropped by an annual 8.1 percent.

Output of the food, drinks and tobacco segment fell by 4.8 percent.

Adjusted for the number of working days, of which there were two fewer in December than in the base period, output increased by 5.7 percent.

For the full year, industrial output climbed by 5.8 percent.

Month on month, output fell by 3.8 percent based on seasonally and working day-adjusted data.

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