Xpat Opinion: New Highs In FDI In Hungary

  • 8 Aug 2013 9:00 AM
Xpat Opinion: New Highs In FDI In Hungary
By Ferenc Kumin: Hungary is doing better on foreign direct investment, let’s take a closer look at the data because the numbers indicate a favorable trend. In terms of FDI, 2012 was a strong year for Hungary. Total FDI amounted to over 10 billion euro, an all-time high. Similarly, outward FDI also reached new heights, at 8.2 billion euro. After adjusting the inflow to losses and restructuring, the net 2012 FDI came to 3.1 billion euro. To put that in perspective, compare that with the figures for 2009 to 2011 when net FDI was 1.288 billion, 1.237 billion, and 1.126 billion euro, respectively.

That means that last year, net investments nearly reached the amount invested in the previous three years combined. All this during a time when total FDI worldwide declined 18 percent in the same time frame as it nearly tripled in Hungary.

Most of this investment came from Luxembourg, Italy, Germany, the UK, and Austria.

The Hungarian government signed strategic partnership agreements with numerous companies to encourage more investment, and thus job growth. Some of these fields include the automotive industry (Audi, Mercedes, Opel, Bridgestone, and others), pharmaceuticals (TEVA, Mylan, and others), electronics (Robert Bosch, Nokia Siemens), and many others. These agreements signify the increase of one-off investments, like building new production facilities, as well as reinvestment, like increasing existing production capacity. These companies contribute meaningfully to the Hungarian economy, providing not only good jobs but business for Hungarian suppliers.

Clearly, when we look at the economic growth figures, there’s still much to be done. But to those critics who say that investors are fleeing Hungary, well, the numbers tell a different story. On FDI, the nation is doing far better that it had been. The OECD predicts that Hungary’s GDP will grow +0.5% this year and +1.3% in 2014, made possible in part of course by our investors, who light up our country with innovative workplaces.

Source: A Blog About Hungary

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