GDP (Million $) – 247,759
GDP per Capita ($) – 25,916
Growth Rate (%) – 0.6
Population – 9,560,000
Area (km²) – 93,030
Capital – Budapest
Source: IMF, 2025
Hungary is an export-oriented economy and highly integrated with European supply chains. It is a leading destination for foreign direct investment in Central Eastern Europe and specializes in vehicle, electronics, and machinery production.
The future trajectory of the Hungarian economy is closely linked to the performance of EU economies, on which it is heavily dependent, and the magnitude of the increase in domestic demand. The performance of its export-oriented manufacturing sector is expected to be decisive in this regard.
Slow growth in Germany, Hungary's main trading partner, will have a significant impact, particularly on the country's automotive, electronics, and machinery sectors, which are highly integrated with Western European supply chains.
FOREIGN TRADE
During the economic transition period, the composition of foreign trade also underwent transformation. Electronics and telecommunications equipment, automotive parts, and machinery have become important export products. The re-export of imported processed goods has played a major role in the growing share of these items in exports. Although food products remain an important export category, their share in total exports is relatively low.
Machinery and transport equipment rank first in both Hungary’s exports and imports. In this product group, Hungary is a net exporter. This structure is largely attributable to the investments made by multinational companies in Hungary and the production capacity created through these investments.
In 2024, the country’s exports reached 168 billion USD. Its main export partners were Germany, Romania, Poland, Italy, and Slovakia. Türkiye ranked 17th with a 1.8% share in Hungary’s exports. The main export items in 2024 were automobiles; parts and accessories for motor vehicles; electric accumulators (including separators); automatic data processing machines and related units; magnetic or optical readers and data processing devices; and medicaments prepared for therapeutic or prophylactic use.
In the same year, Hungary’s imports amounted to 152 billion USD. The main import partners were Germany, China, Poland, Austria, and Slovakia. Türkiye ranked 19th with a 1.1% share in Hungary’s imports. Key import products in 2024 included parts and accessories for motor vehicles; telephone apparatus and other devices for transmitting or receiving sound, images, or other data; automobiles; sera, vaccines, toxins, and similar products; and electric energy.
INDUSTRY
Industry accounts for one-third of Hungary’s gross national product, and the development and support of the manufacturing sector is one of the strategic priorities of the Hungarian government. In recent years, Hungary has hosted hundreds of new industrial investments.
The largest investors in 2018 included Continental, BMW, Sanmina, Rehau-Automotive, Flex, SMG, GS Yuasa, and SK Innovation. In 2020, China was the leading investor, with major projects by SEMCORP Group (183 million euros), Lenovo (25 million euros), and Shenzhen Kedali (40 million euros). In 2022, Hungary received a net inflow of 9.3 billion euros in foreign direct investment, and as in 2019 and 2021, South Korea remained among the top five investor countries.
In 2023, official statistics reported 6.2 billion euros in FDI, with Belgium (3 billion euros), the United States (1.6 billion euros), and China (863.1 million euros) standing out. In 2024, Hungary received a net 5.2 billion euros of foreign investment. Austria ranked first with approximately 2 billion euros, followed by South Korea (1.6 billion euros) and the Netherlands (1.34 billion euros). China also stood out as the fourth-largest investor with 753 million euros, driven by BYD’s investment and the earlier decision by CATL in 2022.
By sector, the automotive industry attracted 1.5 billion euros and remained the top investment field for the second consecutive year. The electrical equipment industry ranked second with 650.5 million euros. For investors, key sectors include automotive, electronics, pharmaceuticals, medical technologies, information and communication technologies, energy, logistics, food, and tourism.
AUTOMOTIVE INDUSTRY
The automotive industry has achieved significant gains in recent years and has become one of the main driving forces of the Hungarian economy.
As a member of the European Union and the Schengen Area, Hungary offers a strategic location that serves as a regional distribution center. It is the only country in Europe that hosts production facilities of all three premium German car manufacturers—Audi, BMW, and Mercedes—outside Germany itself.
With around 700 automotive companies, the sector generated 26.1 billion euros in production value in 2021, accounting for 17% of the country’s GDP and 24% of its manufacturing industry. In 2022, production reached 31.3 billion euros, representing 19% of GDP. In 2023, it rose further to 35.8 billion euros, corresponding to an 18% share of GDP. In 2024, the production value fell to 33.1 billion euros and its share declined to 16%. Its share within the manufacturing industry stood at 26%.
Major automotive manufacturers operating in Hungary include Mercedes (Kecskemét), Audi (Győr), Opel (Szentgotthárd), and Suzuki (Esztergom). Chinese company NIO also produces EV battery components and provides engineering and R&D services. JLR, Ford, and Nissan operate engineering and business service centers in Budapest. Other major sector players include Continental, Hankook, Aptiv, Bosch, SK Innovation, Samsung, Valeo, Motherson, Mahle, BorgWarner, and Denso.
According to official Hungarian statistics, 417,000 cars were produced in 2021, 442,000 in 2022, and 507,000 in 2023. Meanwhile, HIPA (Hungarian Investment Promotion Agency) reports that 1.9 million engines were produced in 2023. The sector employs more than 172,000 people.
Automotive parts manufacturing is also a critical sector. In addition to engine production, Hungary is an important manufacturing base for tires, batteries, automotive glass, steering systems, powertrain components, and automotive electronics.
MACHINERY INDUSTRY
The machinery sector is one of the key pillars of Hungary’s industrial structure, supplying high-value-added components and production systems to the automotive, energy, defense, and electronics industries. It is strategically important for both exports and employment. However, in 2024–2025 the sector experienced a noticeable slowdown in production and order volumes.
As of 2024, exports of machinery and mechanical equipment reached approximately 24 billion euros, marking a 14% increase year-on-year. This demonstrates the sector’s strong export orientation. However, production indicators paint a more cautious picture. According to the Hungarian Central Statistical Office (KSH), total industrial production fell by 3.3% in the first half of 2024. Export sales dropped by 5.3%, while domestic sales declined by 2.8%.
The trend is more pronounced in subsectors. In the category “machinery and equipment n.e.c.” (not elsewhere classified), production volume in April 2024 decreased by 9.8% year-on-year. Similarly, in the “basic metals and fabricated metal products (excluding machinery and equipment)” category, the production index fell to 80 in August 2024, indicating roughly a 20% real contraction compared to the same period of the previous year.
Machinery remains strong in Hungary’s overall export structure. In 2023, exports of “machinery, mechanical devices, and computers” amounted to approximately 23.2 billion USD, representing 14.4% of total exports. This highlights the sector’s deep integration with external markets and shows that weak domestic demand has been partially offset by export performance.
In sub-segments, metal-forming machines and machine tools operate on a relatively small scale but stand out with high-tech, niche production capabilities. Market research indicates that this segment is expected to reach a value of around 124.5 million euros by 2025, although production capacity is concentrated among a limited number of firms.
Weak production indicators persisted into the first half of 2025. In June 2025, overall industrial production fell by 4.9% year-on-year, negatively affecting capital-goods sectors, including machinery and equipment manufacturing.
IRON AND STEEL INDUSTRY
Hungary’s iron and steel sector is relatively small at the regional scale but remains strategically important due to its production capacity, modernization efforts, and export linkages.
Hungary’s crude steel production in 2023 was recorded at approximately 0.5 million tons, highlighting the sector’s limited size within the national industrial structure. According to the European Steel Association (EUROFER), around 5,300 people are directly employed in the Hungarian steel industry, representing about 1.75% of total EU steel industry employment.
The sector faces challenges in capacity utilization and modernization. At Dunaferr—one of Hungary’s largest steel producers—modernization efforts are ongoing. The company is not operating at full capacity, and there are assessments indicating that while Hungary’s steel production capacity stands at around 2 million tons per year, the actual requirement is closer to 3.5 million tons annually.
In sub-segment data, the market for cold-drawn bars and solid profiles in Hungary was valued at approximately 33.675 thousand euros (≈ €33,675,000) in 2023. This represents a 0.85% increase over the previous year, while the five-year compound annual growth rate indicates a slight contraction of approximately –0.46%.
