GENERAL FACTS
Considered as an important geopolitical and economical force in central Europe, Hungary is a landlocked country surrounded by Croatia and Serbia in the south; Slovakia in the north, Austria in the west, Romania, Ukraine in the east, Slovakia in the north and Slovenia in the southwest. Its july 2011 population is estimated at 9 976 062. View as one of the most beautiful cities in the old continent, Its capital Budapest is an historical place in Europe and home of many world heritage sites from which belong the banks of the Danube, the Buda castle and the millennium underground railway which is the second oldest in the world. Its lovely greenery and its famous mountains located in the Carpathian Basin as well as its largest grassland in Europe are as many wonders that attract millions of tourists each year in the country.
ECONOMIC OVERVIEW
Hungary has made a transition in its economy moving from a centrally directed to an open economy and has known these last years an inflow of a huge amount of foreign direct investment and private ownership in its big corporations. At the eastern and central European scale, Hungary stands at the third place in receiving FDI right after Czech Republic, and Slovakia. The private sector contributes immensely to the country GDP which, in 2010 and at constant price (real GDP) was estimated at 16 108.64 billion of Hungarian forint. This statistic compared to last year reveals a rise of 1.21%. This growth is a result of an extensive trade with an exceptionally high export growth rate from 2000 to 2008 of 11.5%. The soil richest of minerals encompasses bauxite, coal and natural gas. The country is endowed with heavy industry which forms the biggest part of its output. Among main industries is the car manufacturing favored by a well educated workforce having good knowledge in new technologies and also more recently the country experiences a soar in service activities. According to an estimate of Ernest & young, services represent the greatest stake of foreign direct investment accounting for 56%.
INDUSTRY
Major industry in Hungary includes mining, metallurgy, construction materials, processed foods, textiles, chemicals, especially pharmaceuticals, motor vehicle production and since some years already electronic appliances and components. The most important being automobile manufacturing, in 1992, Suzuki and Opel began producing automobiles in Hungary, the first produced there since before World War II. Suzuki increased annual output at the Magyar Suzuki Corporation from 29,000 to 50,000 units starting in the 1995 fiscal year, and in 2005 the automobile industry was estimated to be worth EUR 8 billion by the Association of Hungarian Automotive Industries. At that time, the average annual growth rate of the electronics manufacturing industry in Hungary is estimated to slow down due to an imperious competition in the domain. However, electronics manufacturers in the country have been investing in new production technologies and increasing the automation of manufacturing facilities. Working in closer cooperation with end users to provide more effective and better quality services coupled with investment incentives from the government and economic funding from the European Union, have favored the growth of the electronic manufacturing markets in the country. As a result, Hungary since then has seen a major increase in investments in the electronic manufacturing sector over the past few years. Nowadays the country possesses one of the best component supplier bases in CEE and has a well-developed infrastructure in place. Further, investment incentives such as tax holidays and structural funds from the EU have made Hungary an attractive location for electronic manufacturing. Additionally, Hungary is one of the world's leading producers of information technology equipment with exports of more than $19 billion in 2006. This places Hungary behind only giants such as the US, China, France and a select few others that produce more in IT equipment each year.
HUNGARY - A REGIONAL FIRST IN ELECTRONICS PRODUCTION
Source: Yearbook of World Electronics Data 2009/2010, Reed Electronics Research
LABOR FORCE
Without any doubt, Hungarian labor force is one of the most innovative and productive in the CEE region. With an impressive number of graduate students from various universities across the country, each one specialized in a particular domain from engineering, medicine, economics and sciences, Hungary’s labor force of about 4.2 million is highly educated and highly skilled. During the past ten years the number of students receiving college degrees has more than doubled. Most of these graduates speak English and at least one other foreign language. About two-thirds of the employed population has completed some form of secondary, technical or vocational education. Beside, the Hungarian employment law complies with those of the major high industrialized countries. For instance, the working time is 8 hours per day with a maximum of 48 hours per week and a 2 days’ rest period. The term of employment are agreed upon mutual acquiescence of both parties and can be terminated any time each of them desires. With a low rate wage average compared to other countries in the CEE region, Hungary is arguably one of the best destinations to invest.
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