Following a period of falling investment over the past 5-6 years, last year there was a positive U-turn in this field and data show growth of some 10 percent in the third quarter of last year, Minister of State for Economic Regulation Kristóf Szatmáry said at a press conference in Budapest.
The Minister of State expressed hope that investment projects will steadily underpin the Hungarian economy. As Kristóf Szatmáry explained, the Government’s efforts to create an environment in which domestic and international enterprises find it rewarding to invest and develop have been instrumental in this achievement. He added that in certain fields, such as public utility services, investment declined, but projects in other sectors have sufficiently compensated for this shortfall.
He emphasised that FDI has been a determining economic factor since the regime change, and international corporations which have a presence in Hungary provide 25 percent of gross added value, 27 percent of investment and 70 percent of exports.
Kristóf Szatmáry pointed out that the Government has hitherto concluded Strategic Partnership Agreements with 39 companies active in Hungary, which have as a whole invested some HUF 650bn in new projects and created more than 5500 new jobs. The Government has also fostered closer relations with strategic partners in the field of R&D.
Preparation of large projects backed by individual Government decisions has also been continuous. Currently, 13 large investment projects are in the final phase of negotiations which, when realized, will provide jobs for some 4000 people and implement projects valued at almost HUF 110bn. In addition to these, negotiations are ongoing regarding 19 other large-scale projects, which are worth HUF 280bn and expected to give work to 6500 people. Some of these, he added, are green field investments and others are projects to increase existing capacity.
The Minister of State singled out the vehicle manufacturing sector – the Government concluded 13 Agreements out of the 39 with companies related to vehicle manufacturing – the output of which increased by 27 percent in September 2013, 28 percent in October and 21 percent in November, year-on-year. In Hungary, currently 712 enterprises are vehicle manufacturers or related suppliers, which employ some 120 thousand people and export some 90 percent of their products. The production capacity of the sector is 400-500 thousand units a year, well above European average, he said.
Kristóf Szatmáry stated it is a positive sign that economic growth observed recently has not only been the result of the activity of large multinational companies. As lending data are indicating – regarding either the Széchenyi Credit Card, Eximbank programmes or the Funding for Growth Scheme of the National Bank of Hungary – expansion is broad-based. Investment projects of SMEs, fuelled by low-cost loans and EU resources, have also been picking up, as project plans that had been shelved due to the economic crisis, the shortage of credit and the slump in consumption are being dusted off, he said.
In the opinion of the Minister of State, as both international and domestic enterprises have revived investment plans, chances are good that the trend reversal concerning investment will persist and lift Hungary’s economy.
(Ministry for National Economy)
