Despite hysteria-mongering, foreign investors' confidence in Hungary unbroken, as evidenced by growing number of investments

A growing number of high value-added investments keep arriving in Hungary, as evidenced by the fact that the amount spent on research and development exceeded €2.7 billion last year, Hungary's Minister of Foreign Affairs and Trade Peter Szijjarto said in Budapest on Friday.

Budapest, 2023. május 31. Szijjártó Péter külgazdasági és külügyminiszter beszédet mond a kínai Jiecang, a lineáris hidraulikus szerkezetek elõállításával foglalkozó vállalat beruházásbejelentõ sajtótájékoztatóján a Külgazdasági és Külügyminisztériumban 2023. május 31-én. Kaposvárra hozza legnagyobb európai gyártóegységét a kínai cég, amely mintegy 25 milliárd forintos beruházásával 200 új munkahely jön létre a városban. MTI/Kovács Attila Fotó: Kovács Attila

This is well evidenced by the fact that last year more than €2.7 billion was spent on R&D, which represents a 15-percent increase in one year and exceeds 1.6 percent of the country’s GDP, he noted.

He went on to add that the number of R&D positions increased by almost 4 thousand in a year and now exceeds 90 thousand.

Regarding this, the minister emphasized that attracting R&D to Hungary is key to improving production efficiency, which is linked to sustainability and reducing the country's ecological footprint.

Finally, he also touched upon the fact that although Hungary is only 95th in the world in terms of population, it ranks 34th globally in terms of export.

"All this goes to show that Hungarian creativity, efficiency and innovative capacity are placing us much higher in such rankings than the size of the country or our population, or our strength would justify,"

he said.

German companies are still the largest group of investors in Hungary, although there are also Japanese companies among the top ten, he pointed out. “When the companies of these two countries have a significant presence in Hungary, it’s usually good news for us,” he said.

FM Szijjarto: Despite the hysteria-mongering, foreign investors' confidence in Hungary remains unbroken

The confidence of foreign investors in Hungary “appears to be unbroken” despite “all the attacks, emotional blackmail and hysteria-mongering.” It helps Hungary maintain its economic growth, FM Szijjarto said on on Friday, according to a foreign ministry statement. 

Peter Szijjarto also spoke at a project launch by Austria’s plywood maker KRONOSPAN-MOFA, and said the group would increase its capacity at its plant in Mohacs, southern Hungary, using a budget of €5.4 million. He added that the Hungarian government was supporting the project with a grant of €771 thousand, “helping to preserve 230 jobs.”

In his speech, Mr Szijjarto highlighted the extraordinary challenges of recent years, stressing that the coronavirus epidemic and the Ukraine war have turned the world economy upside down twice in a short space of time. 

Every country has reacted differently to this situation, he underlined. Many countries decided to implement austerity measures, but the Hungarian government's economic philosophy is that the best way out of a crisis is to support investment, he added.

"An economic crisis will always hit the jobs, so the most important task of a government in an economic crisis is to protect workplaces. And the jobs can be protected via investment and providing support to these investment projects," he said.

The success of the government's measures was well illustrated by the fact that last year the domestic economy achieved a triple record, as investment, exports and employment all reached record highs, he stressed.

"These three are strongly intertwined, because if there is more investment, there are more jobs, if there are more jobs, the productivity of labor increases, and when it does, we can export more," Mr Szijjarto opined.

Hungary had seen 6.5 billion euros in foreign investment last year, which he described as a “huge record.” He added, however, that last year’s record had already been broken in the first half of 2023, while greenfield developments had shrunk by 15% elsewhere in the European Union.

None of this would have been possible, if Hungary was a less a attractive investment destination for international companies than before, and if these companies did not have unbroken confidence in the Hungarian economy, he said

"We know all too well that many have tried to create a situation where the confidence of foreign investors in Hungary would be shattered, where companies would prefer to invest elsewhere. But despite all the attacks, emotional blackmail and hysteria-mongering, the confidence of foreign investors in the Hungarian economy is unbroken,"

he said. 

Touching upon the wood-processing industry, which employs 16,000 people nationwide, Mr Szijjarto said the sector also broke a record last year producing a growth of around 26%, and earnings nearing 1.6 billion Hungarian forints.

Finally, he made mention of the fact that Austria is Hungary’s third largest trading partner, with bilateral trade increasing by 37% in 2022, to a total turnover of a record 17 billion euros, which is also a new record.

Cover photo: Hungary's Minister of Trade and Foreign Affairs Peter Szijjarto (Photo: MTI / Attila Kovacs)