Economy of Hungary

The economy of Hungary is developing and ranks as a high-income, mixed economy. It is the 53rd-largest economy in the world, with an annual output of about $265 billion. Hungary has a skilled labour force and is known for its export-oriented market economy, especially focusing on foreign trade. In 2015, Hungary’s exports were worth over $100 billion, mostly going to the European Union.

Hungary’s economy is mostly privately owned, with a portion of income going to taxes for public services. Household spending is a big part of the country’s economic output. Major industries include food processing, pharmaceuticals, motor vehicles, information technology, and electronics. Hungary is the largest electronics producer in Central and Eastern Europe and a key center for mobile technology and information security.

Budapest is the financial and business capital of Hungary. It is a major economic hub and one of the fastest-growing cities in Europe. The city contributes a large part of Hungary’s national income and has a gross metropolitan product of over $100 billion. Hungary uses its own currency, the Hungarian forint, and is part of the European single market, connecting it to many consumers across Europe.

In recent years, Hungary has been one of the faster-growing economies in the European Union. As of 2024, its estimated annual output was $219 billion, ranking it as the 57th-largest economy in the world. The country has a low unemployment rate and a high standard of living. Key industries today include automobile manufacturing, battery production, electronics, pharmaceuticals, and information technology.

History

Árpád Age

In the age of feudalism, land was very important for the economy. New rules created private ownership of land. There were three types of land ownership: royal, church, and private estate. The royal land of the Árpád dynasty came from old tribal lands.

Private land ownership started from old common lands that were managed by society and became owned by leaders.

From the start of the state, gifts from the king also added to private property. This system created a feudal estate, with old lands and gifts from Saint Stephen I. Béla III was one of the richest kings in Europe at the time. Over time, laws changed so that nobles could not freely sell their land.

The Carpathian Basin was good for farming, so farming grew. In the 11th and 12th centuries, people farmed the land and also raised animals.

Anjou Age

Modern Age

Real GDP per capita development of Hungary

Before World War II, Hungary’s economy was mostly based on farming and small factories. Hungary did not have many natural resources, so it relied on trade with other countries. For example, its main car maker, Magomobil, made only a few thousand cars. In the early 1920s, the textile industry grew fast, and by 1928 it became the most important industry for Hungary’s trade. Companies like MÁVAG sold locomotives to India and South-America.

Post-war Hungarian communism

From the late 1940s, the Communist government took control of industry. Factories with many workers were taken over first. In farming, the government started group farms. New factories were built in the 1950s. Most economic activity was run by the state or group farms. In 1968, Hungary allowed more trade and small businesses.

During this time, life improved. More people finished school, and more homes had electricity and running water. There were more cars, TVs, and other goods.

Though Hungary was one of the more advanced economies of the former Eastern Bloc, by the late 1980s, many factories and farms needed more money to work well. Hungary’s debt to other countries grew a lot—from $1 billion in 1973 to $15 billion in 1993. Hungary made changes to allow more trade and businesses.

Transition to a market economy (1990–1995)

After the end of communism, Hungary had to change from a planned economy to a market economy. With the end of the Soviet Union, Hungary lost markets and support from the Soviet Union. This caused many factories to close and left many people unemployed. The government made changes to help the economy grow again. By the late 1990s, Hungary’s economy was growing, and many foreign companies invested in the country.

The government made reforms to help the economy. However, these changes caused some people to face higher prices. Unemployment went up before it came down. By the end of the 1990s, Hungary’s economy was improving.

The Berthold and Manfred Weiss Canned Food Factory (1880)

Hungary no longer needed help from the International Monetary Fund and repaid its debt to them. Hungary’s economy grew, and many foreign companies invested in the country.

Before 1989, most of Hungary’s trade was with other Eastern Bloc countries. By the late 1990s, most trade was with Western Europe, especially Germany. The United States also became an important trading partner.

With about $18 billion in foreign investment since 1989, Hungary attracted a lot of investment from other countries. Investors liked Hungary because of its skilled workers, tax benefits, and good infrastructure.

By 2006, Hungary’s economy faced problems. Wages grew, but this was mostly because of more government spending. This caused the budget deficit to grow and inflation to rise.

Privatization

In 1990, Hungary created an agency to manage the sale of state-owned companies. Because of Hungary’s large debt, the government sold state property instead of giving it away. Some people were unhappy because they thought the sales were unfair. Foreign investors also started new businesses in Hungary.

The government split up large farms and gave land to former owners or their families. Small shops and businesses were sold. Big companies like Matáv, MOL Group, and MVM Group were also sold.

Chamber of Commerce and Industry of Budapest, beginning of the 20th century

Though most banks were sold to foreign investors, the largest bank, OTP, stayed Hungarian-owned.

Economy since 1995

In 1995, Hungary’s economy faced problems. A new finance minister introduced changes to improve the economy. These changes were supported by international organizations but were not popular with many people.

In 1996, Hungary changed its pension system to include private savings.

In 2006, a new government promised economic reforms but later introduced austerity measures to reduce the budget deficit.

Great Recession

ING headquarters in Budapest

The Great Recession hurt Hungary’s economy. Exports fell, and many people lost jobs. Hungary received help from the IMF and EU to support its economy.

After the recession, Hungary’s economy began to recover. However, in 2011-2012, Hungary’s debt was downgraded by credit agencies because of political changes.

Post-recession

After a mild recession in 2012, Hungary’s economy grew again from 2014. Growth was helped by EU funds and loans from the central bank.

During and after the COVID-19 pandemic

Hungary’s economy grew until the COVID-19 pandemic, when it, like the rest of Europe, faced big challenges. GDP and other measures fell. Unemployment was high until 2021. Since then, the economy has recovered, but inflation rose to very high levels.

Physical properties

Natural resources

Main article: Geography of Hungary

Topographic map of Hungary

Hungary has a land area of 93,030 km² and a small water area of 690 km². Most of the land is flat plains with some small hills. The Great Hungarian Plain and the Little Hungarian Plain cover much of the country. Hungary has good land for farming. However, it does not have many natural resources like coal or oil.

Hungary has forests covering 19% of its land. These forests have many types of trees. Hungary has many rivers, with the Danube and Tisza being the most important. Hungary also has three large lakes, the biggest being Lake Balaton, which is popular for tourists.

Medicinal bath in Hévíz

Infrastructure

Transport

Total length of motorways in Hungary

Main article: Transport in Hungary

Hungary has many roads, including 1,118 km of motorways. Budapest, the capital, is connected by motorways to several neighboring countries. Important travel routes pass through Hungary to Budapest.

Hungary has many airports, with Budapest Ferihegy International Airport being the largest. The railroad system in Hungary is long, with some parts powered by electricity.

Public utilities

Electricity reaches every place in Hungary. Piped gas is available in most settlements. Most homes have running water, and many are connected to sewage systems. The government helps people improve these services.

Internet use has grown in Hungary. Many homes now have internet, most using broadband. In 2004, the government started the eHungary program to bring internet access to public places like libraries and schools.

Sectors

In 2022, the biggest group of companies in Hungary was Services, with 273,851 companies. Next were Finance, Insurance, and Real Estate, and Retail Trade, with 113,153 and 87,237 companies.

Agriculture

Agriculture was an important part of Hungary's economy. It made up about 4.3% of the country's money in 2008. Together with food-related jobs, it used about 7.7% of the workers. Hungary grows crops like wheat, corn, and sunflower. It is also known for foods like paprika and foie gras. The country raises animals like cattle and pigs.

Health care

Main article: Healthcare in Hungary

Hungary has a system where the government pays for health care for everyone. This helps keep people healthy and live longer. The country spends money on health care to keep people well.

Industry

Hungary's industry includes making machines, chemicals, and cars. It also has factories for food and other products. Car factories from big companies like Audi and Mercedes-Benz have been built in Hungary, creating many jobs.

Automobile production

Hungary is a popular place for car companies to build factories. Companies like Audi, Mercedes-Benz, and BMW have factories there, making many cars and car parts. These factories help create jobs and bring money to the country.

Services

The service sector is the biggest part of Hungary's economy. It made up about 65.5% of the country's money in 2023. This includes jobs in banking, logistics, and many other services. Hungary's location in Europe helps it attract businesses and tourists.

Tourism

Main article: Tourism in Hungary

Tourism is very important to Hungary. Many people visit places like Lake Balaton and Budapest to enjoy the beautiful sights and relaxing spas. In 2023, millions of tourists visited Hungary, bringing in a lot of money.

Currency

Hungary uses the Hungarian forint as its money. It has been the country's currency since August 1, 1946. A forint is made up of 100 smaller units called fillérs, but these are no longer used in everyday transactions.

The country has several types of coins and paper money. There are coins worth 5, 10, 20, 50, 100, and 200 forints, and banknotes come in values of 500, 1000, 2000, 5000, 10,000, and 20,000 forints. Some older coins and a banknote have been taken out of use, but prices are still rounded in a fair way.

¹ Current EU member states that have not yet adopted the Euro, candidates and official potential candidates.
² No more than 1.5% higher than the 3 best-performing EU member states.
³ No more than 2% higher than the 3 best-performing EU member states.
⁴ Formal obligation for Euro adoption in the country EU Treaty of Accession or the Framework for membership negotiations.
⁵ Values from April 2025 report. To be updated each year.

	Convergence criteria					Obligation to adopt ⁴	Target date		Euro coins design
Country ¹	Inflation rate²	Government finances		ERM II membership	Interest rate ³		set by the country	recommended by the Commission
Country ¹	Inflation rate²	annual government deficit to GDP	gross government debt to GDP	ERM II membership	Interest rate ³		set by the country	recommended by the Commission
Reference value ⁵	max 3.2%	max. 3%	max. 60%	min. 2 years	max 6.5%	N/A	N/A	N/A	N/A
Hungary	4.2% (as of April 2025)	4.9% (fiscal year 2019)	73.5%	0 years	7.0%	yes	N/A	N/A	in progress

Socioeconomic characteristics

Further information: Education in Hungary

Human capital

Education in Hungary is free and required from age 5 to 16. All children get free pre-school, 8 years of basic school, and 4 years of secondary school. Higher education has three parts and uses a credit system. The government wants to meet European standards and encourages learning new skills and languages. All secondary schools teach foreign languages, and students need a language certificate to graduate. This has led to many more people learning at least one foreign language.

Hungary has some well-known universities, such as:

Semmelweis University with schools in medicine, dentistry, pharmacy, nursing, and physical education.
Eötvös Loránd University (ELTE), which is among the top 500 universities in the world.
Budapest University of Technology and Economics (BME), established in 1782 and considered the oldest technical university in the world.
Corvinus University of Budapest (BCE)
Central European University (CEU)
University of Pécs (PTE)
University of Miskolc (ME)
University of Szeged (SZTE), ranked 451st–500th in the world in 2010.
University of Debrecen (DE)

The government pays for most education, which is about 5% of the country’s yearly income. To improve universities, the government asks students and companies to help too. The European Union also supports education.

But there are some problems. Students in general schools do better than average, but those in vocational schools do much worse. Universities don’t always match what jobs are needed, and the government plans to improve career guidance and create a digital system to help students find jobs.

Brain drain

Hungary sees many young people leaving the country, especially to western or central Europe like Germany, Austria, and the United Kingdom. Many leave because wages are lower than in other EU countries. Since 2010, many Hungarians have moved abroad, with many being young adults and students. This loss of skilled people, called “brain drain,” affects the country’s economy. The Hungarian currency also faces stability issues, and family and education reasons also play a role. With fewer births and many people leaving, Hungary’s population is aging and shrinking.

Social stratification

Hungary, like many countries, has differences in income and wealth among people of different ages, genders, and backgrounds. The country’s income equality is close to the best in the world. About 13% of people live in poverty. Life expectancy is about 73 years.

Women make up about 55% of workers aged 15 to 64, and girls and boys have almost equal numbers in school. However, the Roma in Hungary face big challenges. Many lost jobs after the fall of Communism, and most of the poorest people in Hungary are Roma. Many Roma people face discrimination when looking for work, making it hard for them to find jobs and leading to ongoing problems.

Institutional quality

Twenty years after big changes in the government, corruption is still a big problem in Hungary. The government system is meant to keep powers separate, so courts are independent. But the courts are slow and busy, which makes it hard to handle cases quickly or punish corruption effectively.

Unemployment in Hungary

State participation

The Hungarian National Bank is the central bank of Hungary. Its main job is to keep prices stable, so they don't change too quickly.

Hungary uses a system where the value of its money, the forint, changes based on how much people want it compared to other currencies like the euro. In the past, the forint’s value went down during a big economic problem but went back up afterward.

Hungary’s government spends a lot of money. It takes in about 44% of the country’s total income and spends about 45%. This is more than in many other European countries. The government also tries to follow rules to join the Eurozone, but it still needs to work more to meet all those rules.

Hungary changed its tax system in 2011. Before that, people paid different amounts of tax depending on how much money they made. Now, everyone pays the same tax rate on their income. Companies also pay taxes, and the rate for them has gone down over time. The tax on things people buy, called value added tax, is very high in Hungary.

Miscellaneous data

This table shows important economic numbers from 1980 to 2025. Numbers for 2025 are guesses because the year is not finished yet.

The information comes from the International Monetary Fund's World Economic Outlook database, published in April 2024.

Here are some quick facts about technology in Hungary from 2011:

Number of households – 4,001,976
Number of landline phones – 2,884,000
Landline phones per household – 72.1%
Landline phones per person – 28.9%
Number of mobile phone subscriptions – 11,669,000
Mobile phone subscriptions per person – 117.1%

Broadband connections

Fixed broadband connections – 2,111,967
Mobile broadband connections – 1,872,178
Fixed broadband per household – 52.8%
Mobile broadband per household – 43.4%

Computer and internet use in 2009

Computers – 65% of people
Internet – 62% of people

Year	GDP (in Bil. US$ PPP)	GDP per capita (in US$ PPP)	GDP (in US$ nominal)	GDP growth (real)	Inflation rate (in Percent)	Unemployment (in Percent)	Government debt (in % of GDP)
1980	68.3	6,376	23.0	0.2%	9.3%	0.6%	n/a
1981	76.8	7,182	23.6	2.3%	4.5%	0.2%	n/a
1982	84.0	7,850	24.1	2.8%	7.0%	0.2%	n/a
1983	87.9	8,235	21.8	0.7%	6.4%	0.2%	n/a
1984	93.5	8,784	21.2	2.7%	8.7%	0.1%	n/a
1985	96.2	9,075	21.4	−0.3%	7.0%	0.0%	n/a
1986	99.6	9,434	24.7	1.5%	5.3%	0.2%	n/a
1987	106.2	10,108	27.1	4.0%	8.7%	0.3%	n/a
1988	109.9	10,502	29.7	−0.1%	15.8%	0.5%	n/a
1989	115.0	11,039	30.3	0.7%	17.0%	0.5%	n/a
1990	115.0	11,101	34.4	−3.5%	29.0%	2.1%	n/a
1991	104.9	10,114	34.8	−11.9%	34.2%	8.4%	n/a
1992	104.0	10,027	38.7	−3.1%	23.0%	9.3%	n/a
1993	105.9	10,214	40.1	−0.6%	22.5%	11.3%	n/a
1994	111.3	10,755	43.2	2.9%	18.9%	10.1%	n/a
1995	116.5	11,274	46.4	2.5%	28.3%	10.2%	84.1%
1996	118.7	11,500	46.7	0.0%	23.5%	9.9%	71.3%
1997	124.8	12,112	47.3	3.3%	18.3%	8.7%	61.9%
1998	131.5	12,793	48.7	4.2%	14.2%	7.8%	59.8%
1999	137.7	13,427	49.1	3.2%	10.0%	7.0%	59.7%
2000	146.7	14,348	47.2	4.2%	9.8%	6.4%	55.0%
2001	155.6	15,259	53.8	3.8%	9.2%	5.7%	51.6%
2002	165.3	16,242	67.6	4.5%	5.3%	5.8%	54.8%
2003	174.8	17,236	85.3	3.8%	4.7%	5.9%	57.4%
2004	188.5	18,632	104.1	5.0%	6.8%	6.1%	58.3%
2005	202.9	20,093	113.2	4.4%	3.6%	7.2%	60.2%
2006	217.1	21,544	115.7	3.9%	3.9%	7.5%	64.4%
2007	223.9	22,240	140.2	0.4%	8.0%	7.4%	65.3%
2008	230.2	22,913	158.3	0.9%	6.1%	7.8%	71.2%
2009	216.6	21,594	131.1	−6.6%	4.2%	10.0%	77.5%
2010	220.6	22,026	132.2	0.7%	4.9%	11.2%	80.2%
2011	228.9	22,923	141.9	1.7%	3.9%	11.0%	80.4%
2012	229.5	23,107	128.8	−1.6%	5.7%	11.0%	78.4%
2013	238.4	24,060	135.7	2.0%	1.7%	10.2%	77.1%
2014	253.1	25,623	141.0	4.2%	−0.2%	7.7%	76.6%
2015	264.8	26,863	125.2	3.5%	−0.1%	6.8%	76.7%
2016	273.6	27,833	128.6	2.3%	0.4%	5.1%	76.0%
2017	290.3	29,627	143.1	4.1%	2.4%	4.2%	73.4%
2018	312.1	31,914	160.6	4.9%	2.8%	3.7%	70.8%
2019	336.6	34,445	164.0	4.9%	3.4%	3.3%	65.3%
2020	325.5	33,320	157.2	-4.5%	3.3%	4.2%	79.3%
2021	364.4	37,443	182.3	7.1%	5.1%	4.1%	76.8%
2022	409.0	42,044	177.8	4.9%	14.5%	3.6%	76.4%
2023	426.9	43,907	212.5	0.6%	17.7%	4.1%	73.2%
2024	450.4	46,332	228.8	3.1%	5.4%	3.8%	70.0%
2025*	476.9	49,944	232.0	3.3%	3.5%	4.1%	72.0%

External relations

Hungary joined the European Union on May 1, 2004, after a vote by the people. Being part of the EU helps Hungary because it allows the country to trade freely with other members.

After joining the EU, workers from Hungary were allowed to work in Ireland, Sweden, and the United Kingdom right away. Some other countries had rules that made it harder for Hungarian workers to move there.

By 2007, about 25% of Hungary's exports were high-technology products. This was the fifth highest percentage in the European Union, following Malta, Cyprus, Ireland, and the Netherlands. The average for all EU countries was 17.1%, and for the Eurozone it was 16%.