Foreign direct investment (FDI) in Hungary was a little over €13bn in 2023, double the previous €6.5bn record in 2022, creating 19,000 jobs, also a new record, Minister of Foreign Affairs and Trade Peter Szijjarto announced on January 4. Most investments came from China last year.

Hungary is "among the winners of the new global economic era" as it has attracted a large volume of electric automotive industry investments, he added.

Hungary has become China’s top investment destination in Central Europe this year, and China is the second-largest importer after Germany.

The government has made huge efforts to make the country a major hub for the electric vehicle ecosystem to facilitate the transition of the country's automotive sector, which accounts for a third of manufacturing. In a few years, five out of the 10 largest EV battery makers will have a production base in Hungary. Hungary will have the second-biggest EV battery manufacturing capacity in the world when these investments are completed, he added. 

Chinese carmaker BYD announced at the end of 2023 that it would establish its first European base outside China in Szeged, close to the Serbian border. The new EV production base will be the country's sixth vehicle manufacturing plant.

FDI-based greenfield investments could begin production faster than expected, and these new capacities could also boost Hungary’s export performance and improve the medium- to long-term growth outlooks, the Hungarian National Bank said in its inflation report.

Due to the sharp fall in public sector investments, capital expenditures are expected to decline by more than 10% this year. The nominal investment rate may be around 25% and the real investment rate, calculated at 2015 prices, around 21% over the 2024-2026 period, the MNB added.