2016 OECD Economic Surveys: Hungary 2016

image of OECD Economic Surveys: Hungary 2016

This 2016 OECD Economic Survey of the Hungary examines recent economic developments, policies and prospects. The special chapters cover: Bolstering business investment and Enhancing skills for the labour market.


Bolstering business sector investment

Strong investment is key for accelerating productivity and income growth. The current business investment-to-GDP ratio is not high enough to markedly accelerate the current low potential growth rate. Moreover, a relatively large share of business investment comes in the form of FDI. This reflects comparative advantages in areas, such as a skilled work force, favourable regulation and taxation. These advantages are challenged as neighbouring countries adopt similar FDI regimes. This means that looking ahead boosting business investment must increasingly rely on stimulating domestic firms’ investment incentives. This could arise through more stable regulation and a more pro-competitive business environment. To that aim, the policy formulation process should be strengthened, exemptions from the competition framework limited, and non-discriminatory access to networks should be secured.



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