Economy set for capacity boost in Q2 2021

Hungary is expected to see an increase in economic capacity from the second quarter of 2021 after businesses begin running the new technologies and machinery they invested in through the government's investment support scheme, Peter Szijjarto, the foreign affairs and trade minister, said on Tuesday.

The government has supported the investments of 1,338 Hungarian companies with grants totalling 336 billion forints (EUR 932.0m) in the recent period, Szijjarto said at his annual hearing in parliament’s economic committee. The companies’ investments are worth a combined 824 billion forints and have saved 264,500 jobs, he added.

The minister noted that during the first wave of the coronavirus pandemic in the spring, the European Union increased the limit on state aid for investments to 800,000 euros. The Hungarian government then decided to reimburse under a similar scheme up to half of the investment costs of businesses that retained jobs, capped at the 800,000 euro limit, Szijjarto said. Under this scheme 904 companies have invested a total of 421 billion forints which the government has matched with 201 billion, he said. As a result a total of 154,200 jobs have been saved, he noted.

Szijjarto noted that as the EU temporarily lifted the 800,000 euro threshold, the Hungarian government disbursed grants totalling 70 billion forints. In that phase, 71 businesses made investments worth a combined 204 billion forints. The scheme helped preserve a total of 60,000 jobs, the minister said.

He noted the continuation of investment incentive schemes launched before the outbreak of the pandemic in Hungary. These so far have yielded 73 agreements on investments worth a total of 2 billion euros that are creating 8,000 jobs, Szijjarto said. Most foreign investors, 14, are German, followed by 13 American and 9 Chinese peers, he said.

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