German Foreign Direct Investment (FDI) in Hungary
In the past few decades, Germany has taken a strategic role in the performance of the Hungarian economy, by becoming the largest investor in terms of FDI stock in Hungary. [BBJ] In 2016, Germany’s FDI stock in Hungary reached 29% of all FDI stock in the country. It currently stands at 25% today. There are about 6000 German-owned companies in the country, employing around 300 000 people. Many of these companies operate in high-value added industries such as automotive and electronics.
Content: German FDI in Hungary since 2008 (excluding special purpose entities)
The most important sector is by far the German-owned auto manufacturing industry. According to the Hungarian Central Statistical Office, referenced by Direkt36, the car manufacturing in Hungary accounts for 4.5% of the GDP and the suppliers for this industry account an additional 5-8%. [Direkt36] It shows that German investments play a pivotal role in the country’s economic performance.
The German-Hungarian Chamber of Commerce emphasises on its website that Hungary is slowly transferring to the German model of dual education. This allows young professionals to gain knowledge in theory in higher education, then gain empirical experience, working at partner institutions, companies. German companies’ willingness to participate in these programmes allows them to train the professionals they need.
The largest German owned companies by employee: Bosch Group, Audi Hungaria Zrt., Continental Group, Magyar Telekom Group, Lidl Magyarország Kereskedelmi Bt., Schaeffler Group, Mercedes-Benz-Group, IT Services Hungary Szolgáltató Kft., Penny-Market Kereskedelmi Kft., Siemens Group and Rosenberger Group.
Austrian Foreign Direct Investment (FDI) in Hungary
Austrian FDI in Hungary is high compared to many other countries which invest here, making Austria the 3rd largest holder of FDI position in Hungary, only behind Germany and the Netherlands. However, based on the National Bank of Hungary’s (MNB) statistics, Austrian FDI stock has been mostly stagnant in the last decade, while it showed gradual increase in the past few years.
Content: Austria’s FDI position in Hungary
In 2017, the Austrian Chamber of Commerce conducted a survey in Hungary among 166 Austrian businesses on their experience in the country. The results of the research were positive overall and business leaders expressed confidence in the country’s economic performance that year. However, they also clearly stated that the main obstacle for market expansion is still the limited availability of qualified workforce and the lack of qualifications within the workforce.
Recognising this problem, the government has been working on creating a more favourable business environment by promoting cooperation between the higher education and industrial centres, so students can obtain professional experience early on in their career.
