Overview

Hungary is located in Central Eastern Europe with an approximate population of 10 million, and has fully transitioned from a centrally planned economy to a market-based one since the fall of communism in 1989. It is a member of the OECD (1996), NATO (1999) and the European Union (2004). Per capita income is nearly two-thirds that of the EU-25 average and total GDP is US$182 billion. The private sector accounts for more than 80 percent of GDP. Hungary's strategic location in Europe, access to EU markets, highly skilled and educated work-force, and sound infrastructure have led companies such as GE, Alcoa, Morgan Stanley, IBM and many others to locate facilities here, both in manufacturing and services. Currently, there are 2000 partially owned, and 128 wholly owned US companies operating in Hungary. Many of these companies find that Hungary's geographic position in Central Europe offers a strategic logistical hub within the region. Foreign direct investment (FDI) in Hungary has helped modernize industries, create jobs, boost exports and spur economic growth. Cumulative FDI stock has totaled more than US $90 billion since 1989, the highest in the region on a per capita basis. Among the important sectors: automotive, IT, logistics and, more recently, shared services (e.g., back office and/or call center operations). All told, American companies have invested more than $9 billion in Hungary since 1989, making the U.S. the 4th-largest foreign investor behind Germany, Austria and the Netherlands. Meanwhile, U.S. exports to Hungary have topped US$1 billion dollars in each of the last five years, led by IT equipment, automotive components, industrial engines and other manufacturing supplies. For a complete listing of the most promising industries, please see Chapter 4, Leading Sectors for U.S. Export and Investment.