Hungary competes for EUR 13 billion investment

Hungary is among the top 10 investment destinations in the world, according to the magazine Site Selection, for the third year in a row.

On Kossuth Rádió’s  “Sunday newspaper” show, Minister of Foreign Affairs and Trade Péter Szijjártó said that Hungary has performed well in the post-pandemic competition between countries trying to win manufacturing investments. In this new era, companies have been looking to build new, more efficient facilities instead of simply re-starting production at their former locations, the minister explained. 

Hungary is one of the winners of the global competition for the redistribution of economic capacities, the minister stated, adding that it is currently negotiating for a new EUR 13 billion investment.

One of the largest investment incentive programs of all time was launched in the spring, with Hungarian companies receiving support for investments to increase their competitiveness, capacity and technology. One condition was that they retained their workforce to avoid mass layoffs.

There has never been an example of a public investment incentive scheme handling 1,433 investments at one time, even during a pandemic. The total value of the projects is HUF 1.7 trillion, the minister emphasized. 

Szijjártó talked about the key points that investors take into consideration in choosing a country, one of which is to have an adequate number of skilled workers. With the transformation of its vocational training system, the government has taken significant steps to make sure such a workforce—and enough of it—is available. 

Political stability is also important. The situation in Hungary is unique in Europe in that the ruling party has a two-thirds majority. The third important factor concerns financial aspects, and, presently, Hungary has the lowest levels of corporate and income taxes in Europe, the FM noted. The fourth aspect is logistics and infrastructure development, as investors are also looking at how efficiently they can deliver their products to nearby and distant markets. 

In all four of these areas, Hungary has further strengthened its position during the pandemic, the minister said. 

Szijjártó also recalled that in 2019, most investments came from South Korea, not a Western power. Meanwhile, in 2020, German companies made the most investments in terms of quantity, but China was first in terms of value.

The recent investment protection talks between China and the European Union have made it clear that not only Central European countries, but especially Western European countries, have an interest in maintaining close ties with Eastern countries, he stressed.

The minister mentioned that 10 Southeast Asian countries have recently created the world’s largest free trade area, noting that Hungary supports similar free trade agreements because barrier-free trade benefits it as well. In terms of population, Hungary ranks 92nd in the world, but it ranks 34th in terms of export performance.

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