"European Champion”: Record FDI Received by Hungary in 2023 - China Largest Investor

  • 5 Jan 2024 10:15 AM
  • Hungary Matters
"European Champion”: Record FDI Received by Hungary in 2023 - China Largest Investor
Hungary drew record investments of more than 13 billion euros in 2023, Péter Szijjártó, the minister of foreign affairs and trade said.

The global economy faced “very serious crises” last year, Szijjártó said in a video message, noting that global investments fell by 12.5% from 2021 to 2022 and were down another 30% in the first half of 2023.

This, he said, showed that global investments still fell short of pre-pandemic levels. Hungary, however, has been seeing record investments in these years, the minister said, noting that the economy drew 6.5 billion euros in FDI in 2022 and more than 13 billion last year, supported by 2 billion euros in government grants.

The investments created a record 19,000 jobs, he said. China was the biggest foreign investor in Hungary last year, with the second largest group of investors being Hungarian businesses, Szijjártó said.

This, he added, meant that Hungary now had a strong business sector that could compete with foreign investors.

Szijjártó said Hungary’s investment records clearly made the country a winner of the “new era of the global economy”, pointing out that it had attracted many investments from the electric vehicle industry, which he said would define the new era.

He noted that the world’s biggest electric vehicle producer was set to build the sixth e-vehicle manufacturing plant in Hungary.

Hungary will also have the second-biggest EV battery manufacturing capacity in the world, making it a global leader and the “European champion” of the green auto industry, Szijjártó said.

Finmin Hails Lower Deficit

Hungary’s public finance deficit narrowed in 2023 from 2022, Finance Minister Mihály Varga said on Tuesday, after receiving the first aggregates of budget data from last year.

Varga also hailed that revenues in corporate tax totalled 1,013 billion forints (EUR 2.6bn), over the target, which he said was “another sign of favourable changes in economic trends”.

State debt relative to GDP continued to decline, Varga said, adding that data from the Central Statistical Office were to be received to determine the final figure.

“In 2024, we will continue to reduce the deficit and state debt with the start of stronger economic growth,” he said.

Finance Minister: 2024 The Year Of Boosting Growth

The year ahead will be the year of boosting Hungary’s economic growth, the finance minister said on Thursday, adding that the state budget remained stable.

Mihály Varga told a press conference that the government’s main goal was to keep reducing the deficit and the public debt, adding that “we’re on the right track.”

While 2023 had been a better year for the central budget than 2022, it was not as good as what the government expects from this year, the minister said. A total of 650 billion forints (EUR 1.7bn) was used to pre-finance European Union projects from last year’s budget, he added.

The budget “withstood difficulties without significant external assistance” last year, Varga said, noting that even with increased spending on pensions and defence, the cash flow-based budget deficit fell to 4,593 billion forints.

He said Hungary was one of only 16 EU countries last year to reduce its public debt-to-GDP ratio.

The minister also noted that the EU has transferred 470 billion forints in funding to Hungary over the last 10 days, adding that Hungary has reserves of over 1,200 billion forints.

Meanwhile, Varga said Hungary issued 2.5 billion US dollars of forex bonds on Wednesday. Offers for the 12-year bonds came to 5.6 billion dollars, “showing investor confidence in the Hungarian economy remains strong”, he added.

Varga noted that all of the big three rating agencies have Hungary’s sovereign rating in the investment grade category.

Whereas 10 years ago, half of Hungary’s debt was held by foreigners, today this has been lowered to a quarter, he added. In response to a question, he said the government put GDP growth at 3.6% for this year and had a deficit target of 2.9% of GDP.

Hungary Trade Surplus Euro 1.7 Billion In November

Hungary posted a trade surplus of 1.7 billion euros in November, up from 1.0 billion in the previous month, the Central Statistical Office (KSH) said in a first reading of the data on Thursday.

Exports fell by 3.8% year on year, while imports dropped by 25%. In volume terms, exports were up 1.0%, while imports were down 5.0% month-on-month. Hungary’s trade balance improved by 3.2 billion euros.

Govt Sector Deficit 3.7% Of GDP in Q3 – KSH

Hungary’s government sector had a 701 billion forint (EUR 1.8bn) deficit in the third quarter, equivalent to 3.7% of GDP, preliminary data released by the Central Statistical Office (KSH) on Wednesday show.

Government sector revenue rose by 12.7% to 7,661 billion forints, while expenditures climbed 7.7% to 8,362 billion.

Hungary PMI Edges Up To 52.8 in December

Hungary’s seasonally-adjusted Purchasing Managers Index (PMI) edged up to 52.8 points in December from 52.2 in November, staying over the 50-point threshold that signals expansion in the manufacturing sector, the Hungarian Association of Logistics, Purchasing and Inventory Management (Halpim) said on Tuesday.

Among the PMI sub-indices, the new orders index rose and was over the 50-point mark. The production volume index also increased and was over 50.

The employment index rose and indicated an expansion again. The gauge of purchased inventories climbed and was over the 50-point mark.

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