Macroeconomic situation

In the recent years, the Hungarian economy is characterized by a prosperity; the volume of gross domestic product has been positive since 2017. In 2020 however, this growth slowed as the economic cycle reached a more mature stage and due to the impact of the pandemic.

GDP growth was driven by a 17% increase in investment performance in the previous year. The expansion of investments has contributed to the fact that in addition to boosting the capacity of businesses, the real implementation of the projects launched in the EU budget cycle of 2014-2020 also gained momentum, and the real estate investment activity also increased.

The performance of most of the branches has increased. The driving forces behind the expansion were the market services, the manufacturing and the construction industry, while the performance of the agriculture has slowed the growth of the GDP. In addition to the improving external environment, the favourable financial position of the households contributed to the growth in performance as well. Real wages have jumped and the loan portfolio practically have stagnated.

Between 2012 and 2019 the deficit for the gross domestic product was lower than the 3% Maastricht deficit limit.

Educational expenditures in relation to the GDP have been around 5% in the last decade (2011: 5,1%; 2017: 5,1%; 2018: 5%; 2019: 4,7%, 2020: 4,7 %).  

Employment

In the early nineties, due to changes in ownership, transformation of sectors and regional re-arrangements, the Hungarian labour market was characterised by a dramatic drop in employment and economic activity, a sudden increase in unemployment, and the re-arrangement of labour among the main sectors and occupations. However, social tensions were substantially mitigated by the social insurance systems and by the setting up and strengthening of the legal and institutional frameworks of employment policy. The growth of employment followed (with some delay, fluctuation and a lower level) the stabilisation and growth of the economy.

There has been a significant improvement in the Hungarian labour market in the last decade, thanks to the economic upswing and the government policy measures. In 2018, the unemployment rate was 3.7% compared to 5.1% in 2016. From 2017, there has been a continuous decrease in the number of unemployment.

Employment and the participation in the labour market continued to increase in 2019. Unemployment, including long-term unemployment, fell well below pre-crisis levels. Unemployment is also geographically concentrated, it is higher in less developed regions and rural areas. Between November 2021 and January 2022, the average number of employees was 4,676,000, which is 75,000 more than in the same period of the previous year. Employment in the primary labour market increased, while the number of public employees decreased. (source)

In 2019, 2,479,000 men and 2,032,000 women were employed. In 2020 these figures were as follows: 4 603 200 people were employed, of which 2,462,100 were men, 2,141,200 were women. In 2021, out of 4,634,600 employees, 2,471,800 were men and 2,162,800 were women.

This high level of gender disparity in employment refer to unused labour reserves. Measures have been taken to increase the capacity of childcare facilities in order to utilize these reserves.

Employment – unemployment:

source: KSH

*August 2022

Another challenge is the relatively high and slightly deteriorating level of early school leaving.

In 2020, the number of employed persons aged 15-74 increased to 4,603,200 compared to previous years, public employment decreased slightly, in December 2020 it was 93,200, based on the data of the first quarter of 2021 it was 102,300 in May 2021. In 2021, the total number of employees increased to 4,634,600

The proportion of part-time employment is below the EU average in Hungary (it has been around 4-6% in the last ten years while in the EU28 it is around 19%). This rate was 4.3% in the age group of 15-64 in 2017, 4.2% in 2018 and 4.4% in 2019. In 2020 it increased to 4.8%, and decreased to 4,5 in 2021.