Facts & Statistics

Hungary’s competitiveness has not changed in the last year

Hungary remains 18th in the European Union's competitiveness ranking.

Gergely Baksay, Managing Director of the Hungarian National Bank (MNB), said that the Hungarian economy has successfully fought COVID-19 and its performance now exceeds the pre-COVID level. 

In order to continue growth and catching-up, competitiveness needs to be pursued in a number of areas, such as the financial system, the labor market, small and medium-sized enterprises and the green economy.

The director said that Hungary has seen the fastest growth in credit among EU countries, which helped companies get through the period of lower demand seen during the epidemic. However, the private sector lending-to-GDP ratio is still low at 35 percent, two-thirds of the level in the other three Visegrad (V3) countries and one-third of the EU average; banks’ costs are also high. 

Baksay said that the aging of society is a major challenge, the effects of which could be offset, for example, by developing human capital. The demographic situation has improved significantly thanks to family-friendly policies, with the reproduction rate rising from 1.2–1.3 percent in 2011 to 1.5–1.6 percent. New measures may need to be introduced to achieve further improvements. As a result of widespread employment, the risk of poverty and social exclusion in Hungary has halved in seven years, from 35 to 17 percent, he stressed.

He pointed out that the gap in competitiveness between SMEs and large companies has been reduced, while in the field of health, prevention is a priority. According to the director, the rate of those leaving school early in Hungary remains at 12 percent, which is significantly higher than the EU average of around 9 percent.

The problems of global warming in recent years have highlighted the importance of the green economy and environmental sustainability. Hungary is more energy-efficient and produces more energy than the EU average, but it still uses more resources than it has available, he added.

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