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Competitiveness and good governance
Hungary's competitiveness has deteriorated, while labour productivity is only growing at a slow rate. Corruption is the most severe problem of the economy. In terms of transparency, the quality of has significantly worsened.
In terms of competitiveness, we are lagging behind the reference countries. Compared to the previous year, Hungary slipped back three places in the World Economic Forum (WEF) competitiveness ranking. All the other countries in the region managed to show improvement. The Czech Republic and Poland both surpass Hungary on almost all the 12 competitiveness pillars, while Romania also enjoys better ranking in many respects.
Productivity is slowly growing, but it is far below the EU average.
It is difficult to start and run a business today in Hungary, even compared to the countries in the region. Regulations are complicated and the tax burden is high.
While corruption is considered a severe problem in Hungary, Tárki and other pollsters found that people feel developments to be positive and the institutions are perceived as less corrupt than before. Meanwhile, controlling corruption and the law play a decreasing role, with the quality of the relevant Hungarian legislation deteriorating. On the international corruption index published by OCCRP, the Hungarian prime minister is surpassed in terms of corruption only by Putin.
The Hungarian economy remained vulnerable even with the significant adjustment packages. This is indicated by the fact that Hungary's net international investment position is much worse than both the EU and the V4 averages. Our financial exposure amounted to 103% of the GDP in 2012 (the EU average being 32.5% and the V4 average amounting to 70.8%).
