Hungary's Economy: Manufacturing, EU Funds, and the Forint

Hungary is a Central European economy and one of the longer-standing members of the European Union (joined 2004). For American readers, the easiest way to picture it: Hungary has about 9.6 million people — roughly the population of Michigan — in a country slightly smaller than Indiana. Hungary is best known for automotive and electronics manufacturing for German-led European supply chains, a large inflow of EU structural funds, the forint currency (Hungary is in the EU but not the eurozone), and a long-running set of policy disagreements with the European Commission over rule-of-law and budget rules.

This is a plain-English tour written for American readers. For the U.S. picture, see The State of the U.S. Economy and the broader Economy hub. For other countries, see the country economies index.

How big is the Hungarian economy?

For example, Hungary's recent annual GDP has run around HUF 78 trillion, or roughly $215 billion USD, according to the World Bank and the Hungarian statistics office, the Hungarian Central Statistical Office (KSH). That makes Hungary about one-hundred-and-twentieth the size of the U.S. economy by output. GDP per person sits around $22,400 USD at official exchange rates — below the EU average but above most non-eurozone Central European peers and rising over the long run.

The official Hungarian numbers are published by KSH, and additional financial statistics come from the central bank, the Magyar Nemzeti Bank (MNB).

The biggest industries

Hungary has one of the most manufacturing-intensive economies in the EU. The main pillars:

• Automotive manufacturing — Audi (Győr), Mercedes-Benz (Kecskemét), Suzuki (Esztergom), and BMW (under construction at Debrecen) operate major plants. A deep network of Tier 1 and Tier 2 suppliers serves both Hungarian and broader European auto production.
• Electric-vehicle batteries and electronics — Hungary has attracted some of the largest battery-cell investments in Europe, including from CATL, Samsung SDI, and SK On, with major sites at Debrecen, Göd, and Komárom.
• Pharmaceuticals — Gedeon Richter is the largest Hungarian-headquartered pharma firm; multinationals including Sanofi and Teva operate plants.
• Information technology and shared services — Budapest hosts a notable shared-services and IT cluster serving global firms across Central Europe.
• Agriculture and food — wheat, corn, sunflower, dairy, poultry, and the Tokaj wine region.
• Tourism — Budapest is one of Central Europe's most visited cities, with thermal baths, the Danube riverfront, and historical sites driving year-round arrivals.
• Financial services — OTP Bank is the largest Hungarian-headquartered bank and operates across Central and Eastern Europe.

About 80% of Hungarian GDP is linked to exports, with most flowing to the EU and especially to Germany.

Currency and the central bank

Hungary uses the Hungarian forint (HUF). One U.S. dollar typically buys somewhere between HUF 350 and HUF 390, depending on the exchange rate. Hungary is a member of the European Union but is not in the eurozone — Hungary is treaty-bound to eventually adopt the euro but has no fixed timeline.

The Magyar Nemzeti Bank (MNB) sets monetary policy and the benchmark policy rate. The MNB targets inflation at 3% per year (with a ±1 percentage-point band), broadly in line with other Central European inflation-targeting central banks. MNB policy rates moved sharply higher during the 2022-2023 inflation spike — among the highest in the EU — and have since been brought down as inflation receded.

Trade with the United States

The U.S. is one of Hungary's larger non-EU trading partners. Total U.S.-Hungary trade runs around $7 billion USD per year combined. Hungary sells the U.S. machinery, vehicles and parts, electrical equipment, pharmaceuticals, and audio and video equipment. The U.S. sells Hungary aircraft, machinery, electronics, and pharmaceuticals. The U.S. side sits at the International Trade Administration.

Germany is by far Hungary's largest trading partner — Hungarian manufacturing is deeply integrated into German auto and industrial supply chains. Austria, Italy, China, and France are also significant.

EU funds and the convergence story

Since joining the EU in 2004, Hungary has been one of the larger per-person recipients of EU structural and cohesion funds, with billions of euros flowing into highways, rail, water and sewerage, energy, and digital infrastructure. EU funds have also been a recurring point of friction: the European Commission has at various points withheld or suspended portions of EU funding to Hungary over rule-of-law and budgetary-governance concerns. The flow of EU funds — both received and contested — is one of the more closely watched fiscal variables in Hungarian economic policy.

Convergence — a poorer economy growing faster than richer peers and gradually closing the income gap — is a central concept in development economics. Hungarian GDP per person was about half the EU average at accession and has risen toward roughly three-quarters of it since.

Cost of living

Cost of living in Hungary is below the U.S. and Western European averages but has been rising. Budapest is the most expensive city, with housing costs that have risen significantly; Debrecen, Szeged, and other regional centers are notably cheaper.

How Hungary's economy affects the U.S.

Hungarian-built Audi, Mercedes-Benz, BMW, and Suzuki vehicles and components feed European supply chains the U.S. participates in indirectly. Hungarian battery cells are an important input for European EV production. Gedeon Richter pharmaceuticals are sold in U.S. markets through partnership and licensing arrangements. Budapest is a regional headquarters for U.S. firms operating across Central Europe.

Regions and the western concentration

The Hungarian economy is concentrated in the central and western regions. Budapest and Pest County hold about a third of the population and produce a much larger share of GDP, with the financial sector, the largest services concentration, and most corporate headquarters. Western Transdanubia around Győr holds the Audi plant and a deep automotive supplier base. Central Transdanubia around Székesfehérvár hosts additional manufacturing. Central Hungary around Kecskemét holds the Mercedes-Benz plant. Northern Great Plain around Debrecen holds the BMW plant under construction and major battery investments. Southern Great Plain around Szeged combines food processing with university-driven research. The eastern counties have lower average incomes and have been larger recipients of EU regional development funds.

A note on the numbers

Numbers in this article change every quarter. Always check the latest from the World Bank Hungary profile, the International Monetary Fund, the Magyar Nemzeti Bank, and the Hungarian Central Statistical Office for the most current data.