Turiba UniversityFaculty of Business Administration

ERGASHEV ABDUJABBOR

UVA1D1

Comparative Study of Business Environmentin Hungary

INDIVIDUAL RESEARCH PAPERIN INFORMATION SELECTION AND INTERPRETATION

Department of CommerceLecturer: Dace Amsone, Mg.sc.soc.

Riga, 2016

Turiba University

Faculty of Business Administration

RESEARCH PAPER

ContentsBUSINESS ENVIRONMENT.................................................................................................................5List of indicators (OCED, EUROSTAT)..................................................................................................8COUNTRY PROFILE..............................................................................................................................9

1. AGRICULTURE..............................................................................................................................92. DEVELOPMENT.............................................................................................................................93. ECONOMY......................................................................................................................................94. EDUCATION.................................................................................................................................105. EMPLOYMENT RATE.................................................................................................................106. POPULATION...............................................................................................................................117. ENVIRONMENT...........................................................................................................................118. ENERGY......................................................................................................................................129. FINANCE.....................................................................................................................................1210. GOVERNMENT........................................................................................................................1311. HEALTH....................................................................................................................................1312. INNOVATION AND TECHNOLOGY.................................................................................1313. JOBS............................................................................................................................................1414. SOCIETY...................................................................................................................................1415. CLIMATE CHANGE...................................................................................................................1516. GENDER......................................................................................................................................1517. INFRASTRUCTURE...................................................................................................................1518. AIR AND GHG EMISSIONS......................................................................................................1619. INFLATION.................................................................................................................................1620. FOREIGN DIRECT INVESTMENTS.........................................................................................16

SUBSTANTIATION OF THE CHOSEN SET OF INDICATORS.......................................................18COMPARATIVE ANALYSIS OF THE SELECTED BUSINESS ENVIRONMENT INDICATORS19Conclusion..............................................................................................................................................28

Contents

Hungary was the first country in central and Eastern Europe to apply for member

ship of the EU,has been one of the founding members of the Visegrad

group,which was formed in 1991 further has been a member of the OCED since

1996 and a full member of the NATO since 1999,joined the EU on may 1 2004

became,a

member

state of

the

Schengen

area in

2007

Hungary Introduction

Fig 1[Source: http://ec.europa.eu/eurostat]

BUSINESS ENVIRONMENT THE HUNGARIAN ECONOMY

Hungary has a moderately developed agro-industrial economy that is very sensitive to international

economic factors.

Scarcity of fossil fuels and minerals means that Hungary relies heavily on the import of raw materials.

Two-thirds of the Hungarian Gross Domestic Product (GDP) has generated from the services sector,

including the areas of financial-, real-estate-, economic- and public services. The manufacturing in

industry generates approximately one-fourth of the GDP. The agriculture and the construction only

amount 4-5 percent of the Hungarian GDP.

The GDP growth in Hungary has slowed down in the last few years, because nowadays the economic

factors are very poor in most developing European countries. The total GDP growth was 3.3% in 2014.

NATIONAL CURRENCY, INFLATION AND CENTRAL BANK INTEREST RATES

After the period of the Hungarian market economy transformation in 1989, it was characterized by

high inflation.

At the end of the decade inflation, it slowed down to under 10%. In 2001 during the period of the

previous monetary system of gradual devaluation has later changed to a floating exchange rate system,

where the Hungarian Forint (HUF) exchange rate could fluctuate in a relatively wide margin of

plus/minus 15 % around central parity. At the same time total foreign currency liberalization was

achieved and the Hungarian Central Bank started using the monetary system of inflation targeting. In

2008 the central parity system was abolished and the exchange rate of the Hungarian Forint was free to

fluctuate in any directions without any limits. The Central Bank will however intervene if these

fluctuations endanger them to achieve their inflation goals.

HUNGARY

As a result of these arrangements and a favorable international economic environment, inflation has

decreased to 3.9% at the end of 2006. In 2007 the inflation increased again to 8%, and decreased back

to 0,2% by 2014.

The main sectors - that were taxed on the top of the ‘everyday’ taxes - were banking, energy, telecom

and retail. Though several taxes have been introduced, the word ‘austerity’ has not been used by

government officials. Rather these programs called as actions based on unorthodox economics.

Hungary, as a member state of the European Union may seek to adopt the common European currency,

the Euro. Earlier in 2011, Prime Minister Orbán Viktor was anticipating that Hungary would join the

Eurozone by 2020. To achieve this, first of all Hungary would need to fulfil the Maastricht criteria as

this country was a subject of an excessive deficit procedure.

Despite the programs of the new government, the economy of Hungary slowed down in 2011.

Hungary has seen a shift in terms of foreign investments, like in lower-value textile, food industry, and

investment in vehicle production, renewable energy systems, high-end tourism and information

technology.

Hungary’s low employment rate still remains a key structural handicap to achieving higher living

standards. The government has introduced measures in early retirement, disability and old age

pensions.

2011 FINANCIAL CRISIS

After the crisis in 2008-2009, Hungary was hit again in 2011. The country’s population and businesses

primarily have foreign currency based loans (CHF, EUR, and JPY) and thus are heavily exposed to

currency rate fluctuations.

In 2011, all-time’s highest rate entered in Forint against the Euro making many families and

companies bankrupt.

In the middle of the year 2013, Hungary paid back the total loan to the IMF (International Monetary

Fund). With this, Hungary repaid approximately 11.6 billion dollars, which was taken as a loan in

2008 and 2009.

As a result of the measures taken, the excessive deficit procedure was abrogated by the Council.

Table 1

Economic statistics till 2014

Table 2

List of indicators (OCED, EUROSTAT)Selected indicators for Hungary Table 3

BUSINESS INDICATORS

AGRICULTURE EDUCATION

DEVELOPMENT ENERGY

ECONOMY ENVIRONMENT

GOVERNMENT FINANCE

HEALTH INNOVATION AND TECHNOLOGY

JOBS SOCIETY

CLIMATE CHANGE EXTERNAL DEBT

GENDER INFRASTRUCTURE

GROSS DOMESTIC PRODUCT INFLATION

EMPLOYMENT RATE

Fig:2 Outline of Hungary selected indicators[Source: https://data.oecd.org/hungary.htm]

COUNTRY PROFILE

1. AGRICULTUREAfter the severe recession in the first years of transition, Hungary's economy started to recover in

1994. The macro-economic adjustment program undertaken since 1995 has paved the way for a

sustainable growth in GDP, which reached 4.4% in 1997.Although agriculture's share in the economy

has decreased in recent years, it is still significant: in 1996, agriculture and forestry accounted for 6.6%

of the GDP, and provided employment for more than 8% of the working population. The food

industry's share in GDP was 3.8% in 1996.

Two-thirds of Hungary's total area (9.3 Mio ha) is devoted to agriculture. Crops cover more than 5 Mio

ha, which represents 80% of the agricultural area, while less than 1.5 Mio ha is permanent grassland.

2. DEVELOPMENTOfficial development assistance (ODA) is defined as government aid designed to promote the

economic development and welfare of developing countries. Loans and credits for military purposes

are excluded. Aid may be provided bilaterally, from donor to recipient, or channelled through a

multilateral development agency such as the United Nations or the World Bank. Aid includes grants,

"soft" loans and the provision of technical assistance.

Soft loans are those where the grant element is at least 25% of the total. The OECD maintains a list of

developing countries and territories; only aid to these countries counts as ODA. The list is periodically

updated and currently contains over 150 countries or territories with per capita incomes below USD 12

276 in 2010. Data on ODA flows are provided by the 29 OECD members of the Development

Assistance Committee (DAC).

NET Official development assistance (ODA) is defined as government aid designed to promote the

economic development and welfare of developing countries. Loans and credits for military purposes

are excluded. Aid may be provided bilaterally, from donor to recipient, or channelled through a

multilateral development agency such as the United Nations or the World Bank.

3. ECONOMYAn economy is an area of the production, distribution, or trade, and consumption of goods and services

by different agents in a given geographical location. The economic agents can be individuals,

businesses, organizations, or governments.

Trade in goods and services

Trade in goods and services is defined as change in ownership of material resources and services

between one economy and another. The indicator comprises sales of goods and services as well as

barter transactions or goods exchanged as part of gifts or grants between residents and non-residents. It

is measured in million USD and percentage of GDP for net trade and also annual growth for exports

and imports.

Net national income

Net national income (NNI) is defined as gross domestic product plus net receipts of wages, salaries

and property income from abroad, minus the depreciation of fixed capital assets (dwellings, buildings,

machinery, transport equipment and physical infrastructure) through wear and tear and obsolescence.

Data are under System of National Accounts (SNA 1993) for all countries except for Australia and

United States (SNA 2008). This indicator is measured as an index, in USD per capita, in OECD=100

per capita, and in millions USD at current prices and PPPs.

4. EDUCATION These indicators present data on education resources,

Education spending

Education spending covers expenditure on schools, universities and other public and private

educational institutions. Spending includes instruction and ancillary services for students and families

provided through educational institutions. Spending is shown in USD per student and as a percentage

of GDP.

5. EMPLOYMENT RATEEmployment rates are defined as a measure of the extent to which available labour resources (people

available to work) are being used. They are calculated as the ratio of the employed to the working age

population. Employment rates are sensitive to the economic cycle, but in the longer term they are

significantly affected by governments' higher education and income support policies and by policies

that facilitate employment of women and disadvantaged groups. Employed people are those aged 15 or

over who report that they have worked in gainful employment for at least one hour in the previous

week or who had a job but were absent from work during the reference week. The working age

population refers to people aged 15 to 64. This indicator is seasonally adjusted and it is measured in

terms of thousand persons aged 15 and over; and as a percentage of working age population.

6. POPULATIONPopulation. By the World Bank, ‘Total population is based on the de facto definition of population,

which counts all residents regardless of legal status or citizenship. The values shown are midyear

estimates.’(Population, total, 2016)From the United Nation book, its clear that population is:

‘Estimated population living in urban areas at mid-year as a percentage of the total mid-year

population in a country. Urban areas are defined according to the criteria used by each country or

territory.’(Nations, 2013, p. 25) The same term was described in two years, by the same author as:

‘Estimated population living in urban areas at midyear as a percentage of the total midyear

population in a country. Urban areas are defined according to the criteria used by each country or

territory.

7. ENVIRONMENTEmissions of pollutants and gases from human activities have many negative effects on the local,

regional and global environment. Greenhouse gas (GHG) emissions exacerbate the natural greenhouse

effect, leading to temperature changes and other consequences for the earth's climate.

Air pollutants such as sulphur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO), and

volatile organic compounds (VOC) contribute to regional and local air pollution, and affect human

health and ecosystems.

Municipal waste

Municipal waste is defined as waste collected and treated by or for municipalities. It covers waste from

households, including bulky waste, similar waste from commerce and trade, office buildings,

institutions and small businesses, as well as yard and garden waste, street sweepings, the contents of

litter containers, and market cleansing waste if managed as household waste. The definition excludes

waste from municipal sewage networks and treatment, as well as waste from construction and

demolition activities. This indicator is measured in thousand tonnes and in kilograms per capita.

Water withdrawals

Water withdrawals, or water abstractions, are defined as freshwater taken from ground or surface water

sources, either permanently or temporarily, and conveyed to a place of use. If the water is returned to a

surface water source, abstraction of the same water by the downstream user is counted again in

compiling total abstractions: this may lead to double counting.

The data include abstractions for public water supply, irrigation, industrial processes and cooling of

electric power plants. Mine water and drainage water are included, whereas water used for

hydroelectricity generation is normally excluded. This indicator is measured in m3 per capita (a cubic

meter is the equivalent of one thousand 1 litre bottles).

8. ENERGYThe global energy landscape is changing quickly as a result of economic shifts and

technological advancements. "game-changers" such as the unconventional oil and gas

revolutions, or the rapid retreat from nuclear power in some countries, will further

accelerate this change.

Crude oil production

Crude oil production is defined as the quantities of oil extracted from the ground after the

removal of inert matter or impurities. It includes crude oil, natural gas liquids (ngls) and

additives.

Crude oil is a mineral oil consisting of a mixture of hydrocarbons of natural origin, yellow

to black in colour, and of variable density and viscosity. Ngls are the liquid or liquefied

hydrocarbons produced in the manufacture, purification and stabilization of natural gas.

Additives are non-hydrocarbon substances added to or blended with a product to modify

its properties, for example, to improve its combustion characteristics (e.g. Mtbe and

tetraethyl lead).

Primary energy supply

Primary energy supply is defined as energy production plus energy imports, minus energy

exports, minus international bunkers, then plus or minus stock changes. The international

energy agency (iea) energy balance methodology is based on the calorific content of the

energy commodities and a common unit of account: tonne of oil equivalent (toe). Toe is

defined as 107 kilocalories (41.868 gigaojoules). This quantity of energy is, within a few

per cent, equal to the net heat content of one tonne of crude oil.

Road accidents

Road accidents are measured in terms of the number of persons injured and deaths due to

road accidents, whether immediate or within 30 days of the accident, and excluding

suicides involving the use of road motor vehicles.. This indicator is measured in number of

accidents, number of persons and per 1 000 000 inhabitants .

9. FINANCEThe money circulating in an economy to satisfy its current monetary needs. There are two

indicators for monetary aggregates collected by the oecd: "narrow money" (m1); a means

of exchange and "broad money" (m3); a way to store value. Monetary aggregates are

measured as a seasonally adjusted index based on 2010=100.

Broad money (m3)

Broad money (m3) includes currency, deposits with an agreed maturity of up to two years,

deposits redeemable at notice of up to three months and repurchase agreements, money

market fund shares/units and debt securities up to two years. M3 is measured as a

seasonally adjusted index based on 2010=100.

10. GOVERNMENTGeneral government consists of central, state and local governments and the social security

funds controlled by these units. General government accounts presents data on fiscal

balance, debt, revenues, expenditure, costs and reserves of governments. Central

government consists of the institutional units making up the central government plus those

non-profit institutions that are controlled and mainly financed by central government. The

political authority of central government extends over the entire economy. Central

government can impose taxes on all residents and non-resident units engaged in economic

activities within the country.

11. HEALTHHealth resources includes financial resources (health spending) and human resources.

Health spending measures the consumption of health services and goods, including

outpatient care, hospital care, long-term care, pharmaceuticals and other medical goods,

prevention and public health services, and administration. Health human resources,

including doctors and nurses obviously, play a vital role in delivering health services.

12. INNOVATION AND TECHNOLOGYResearch and experimental development (r&d) comprises creative work undertaken on a

systematic basis in order to increase the stock of human knowledge and to devise new

applications based upon it. The term r&d covers three activities: basic research, applied

research and experimental development. Basic research is experimental or theoretical work

undertaken primarily to acquire new knowledge of the underlying foundation of

phenomena and observable facts, without any particular application or use in view.

Applied research is also original investigation undertaken in order to acquire new

knowledge. It is, however, directed primarily towards a specific practical aim or objective.

Experimental development is systematic work, drawing on existing knowledge gained from

research and/or practical experience, which is directed to producing new materials,

products or devices, to installing new processes, systems and services, or to improving

substantially those already produced or installed.

13. JOBSAverage wages

Average wages are obtained by dividing the national-accounts-based total wage bill by the

average number of employees in the total economy, which is then multiplied by the ratio

of the average usual weekly hours per full-time employee to the average usually weekly

hours for all employees. This indicator is measured in usd constant prices using 2012 base

year and purchasing power parities (ppps) for private consumption of the same year.

Employment rate

Employment rates are defined as a measure of the extent to which available labor

resources (people available to work) are being used. They are calculated as the ratio of the

employed to the working age population. The working age population refers to people aged

15 to 64. This indicator is seasonally adjusted and it is measured in terms of thousand

persons aged 15 and over; and as a percentage of working age population.

Hours worked

Average annual hours worked is defined as the total number of hours actually worked per

year divided by the average number of people in employment per year.

Unemployment

Long-term unemployment refers to people who have been unemployed for 12 months or

more.

Self-employment

Self-employment is defined as the employment of employers, workers who work for

themselves, members of producers' co-operatives, and unpaid family workers.

14. SOCIETYFertility rates

The total fertility rate in a specific year is defined as the total number of children that

would be born to each woman if she were to live to the end of her child-bearing years and

give birth to children in alignment with the prevailing age-specific fertility rates. It is

calculated by totaling the age-specific fertility rates as defined over five-year intervals.

National population distribution

National population distribution is defined as the share of inhabitants by types of regions

in a given country. Population is unevenly distributed among regions within countries.

Differences in climate and environmental conditions discourage settlement in some areas

and encourage concentrated settlement around a few urban centers.

Permanent immigrant inflows

Permanent immigrant inflows cover regulated movements of foreigners considered to be

settling in the country from the perspective of the destination country. They cover

regulated movements of foreigners as well as free movement migration.

Poverty rate

The poverty rate is the ratio of the number of people (in a given age group) whose income

falls below the poverty line; taken as half the median household income of the total

population. However, two countries with the same poverty rates may differ in terms of the

relative income-level of the poor.

Social spending

Social expenditure comprises cash benefits, direct in-kind provision of goods and services,

and tax breaks with social purposes. Benefits may be targeted at low-income households,

the elderly, disabled, sick, unemployed, or young persons.

15. CLIMATE CHANGEIndustrialization has increased emissions of greenhouses gases (GHG) from human activities,

disturbing the radioactive energy balance of the earth-atmosphere system. These gases exacerbate the

natural greenhouse effect, leading to temperature changes and other potential consequences for the

earth’s climate. Land use changes and forestry also contribute to the greenhouse effect by altering

carbon sinks. Climate change is of concern mainly as relates to its impact on ecosystems

(biodiversity), human settlements and agriculture, and possible consequences for other socio-economic

activities that could affect global economic output.

16. GENDERA ‘gender‐responsive’, ‘gender‐sensitive’, or ‘gender’ indicator measures changes relating to

Gender equality over time. Such indicators can be quantitative, based on sex disaggregated statistical

Data  ‐  which can be measured separately for men and women. Literacy is an example. Gender quality

indicators can also capture qualitative changes – for example, increases in women’s levels of

Empowerment or in attitudinal changes to gender equality. Measurements of gender equality might

Address changes in the relations between men and women, the outcomes of a particular policy,

Program -me or activity for women and men, or changes in the status or situation of men and women,

17. INFRASTRUCTUREInfrastructure investment covers spending on new transport construction and the improvement of the

existing network. Infrastructure investment is a key determinant of performance in the transport sector.

Inland infrastructure includes road, rail, inland waterways, maritime ports and airports and takes

account of all sources of financing. Efficient transport infrastructure provides economic and social

benefits to both advanced and emerging economies by: improving market accessibility and

productivity, ensuring balanced regional economic development, creating employment, promoting

labor mobility and connecting communities. This indicator is measured as a share of GDP for total

inland investment and in euros for the road, rail, air, inland waterways and sea components.

18. AIR AND GHG EMISSIONSGreenhouse gases refer to the sum of seven gases that have direct effects on climate change : carbon

dioxide (CO2), methane (CH4), nitrous oxide (N2O), chlorofluorocarbons (CFCs), hydrofluorocarbons

(HFCs), per fluorocarbons (PFCs) and sulphur hexafluoride (SF6). The data are expressed in CO2

equivalents and refer to gross direct emissions from human activities. CO2 refers to gross direct

emissions from fuel combustion only and data are provided by the International Energy Agency. Other

air emissions include emissions of sulphur oxides (SOx) and nitrogen oxides (NOx) given as quantities

of SO2 and NO2, emissions of carbon monoxide (CO), and emissions of volatile organic compounds

(VOC), excluding methane. Air and greenhouse gas emissions are measured in thousand tonnes,

tonnes per capita or kilograms per capita except for CO2, which is measured in million tonnes and

tonnes per capita.

19. INFLATIONInflation by the Wold Bank ‘Inflation as measured by the annual growth rate of the GDP implicit

deflator shows the rate of price change in the economy as a whole. The GDP implicit deflator is the

ratio of GDP in current local currency to GDP in constant local currency.’ (Inflation, GDP deflator

(annual %), 2016)Another definition of inflation was given by Daniel Boussard as ‘nflation is

generally seen as a simple phenomenon: the prices of all elements change at the same rate. The

example presented here deals with a different case: inflation is characterized by changes in the

structure of prices. In particular, prices of articles bought and articles sold do not vary at the same

rates.’ (Boussard, 1984, p. 157) There are two ways, in which inflation may progress: The positive

productivity shock decreases domestic inflation, causing both the real exchange rate and terms of trade

to increase. Furthermore, decreasing inflation leads to decreasing marginal cost of firms and increasing

output; thus the output gap decreases.’(Omran, Ehsani, & Khyareh, 2015, p. 14) The lest definition

was given by Walter Spahe in the journal American Economic Review as ‘a condition resulting from

an extension of purchasing power, either in the form of money or credit, which is not secured by a

sufficient amount of reserves or commodities to liquidate it ’(Spahe, 1934, p. 208)

20. FOREIGN DIRECT INVESTMENTSForeign direct investment, net inflows by World Bank ‘Foreign direct investment refers to direct

investment equity flows in the reporting economy. It is the sum of equity capital, reinvestment of

earnings, and other capital. Direct investment is a category of cross-border investment associated with

a resident in one economy having control or a significant degree of influence on the management of an

enterprise that is resident in another economy. Ownership of 10 percent or more of the ordinary shares

of voting stock is the criterion for determining the existence of a direct investment relationship. Data

are in current U.S. dollars.’ (Foreign direct investment, 2016)Dubos J. Masson wrote about

investment, as ‘any investment can be valued as the present value of the anticipated cash flows from

that investment. Similarly, given a current price and future stream of cash flows, the yield or return on

an investment can also be calculated.’(Masson, 2009, p. 356) Moreover, in the book “Investment

Banking History: National and Comparative Issues (19th-21st Centuries)”, termination was describe as

‘Investment banks are today in the eye of a storm, of an extensive and devastating crisis. They had

huge responsibilities in igniting it, and a part of the public opinion blames them for the derailment of

the world economy from “Main Street toward Wall Street”, and for all the consequences such a turn

has had. Some of them, such as Bear Stearns and Lehman Brothers,paid a steep price for it, though

nothing compared to the huge costs the crisis imposed to so many countries. This notwithstanding,

nothing of what happened in the last few years was implicit in their very original nature, in

intrinsically distorted mechanisms of management of a risky business.’ (Bonin & Brambilla, 2014, p.

23)In the end, here are many investments forms, in which foreign may invest: ‘If the investor decides

to invest at the commodity market via the investment instruments in the paper form, he may decide for

the shares. These securities relate, for instance, to electric energy, oil. Provided the price of the electric

energy grows, the profit will be generated both for the joint stock companies and investors. And

otherwise, provided the electricity price falls, both the investors and businesses will lose (and the share

price will be negatively affected as well). According to Syrový and Tyl (2014, p. 112), commodity

shares represent 30% of the global stock markets. Commodity markets offer more products in paper or

de materialized forms: commodity funds, ETF products, etc.’ (Novotný & Polách, 2016, p. 41)

SUBSTANTIATION OF THE CHOSEN SET OF INDICATORS.

Table- 3

Susbstaional chosen indicators

COMPARATIVE ANALYSIS OF THE SELECTED BUSINESS ENVIRONMENT INDICATORSAgricultural

Fig 3, 4

Development

Fig 5

Here development is always boon to the Hungary when compared to the Poland

where Distribution of net ODA is 0.8millions US dollars, Net ODA 0.1%of gross

national income, Total official and private flows is 127.2 million dollars.

Economy

Fig 6, 7

Economy is always increasing since 2011 CLI 99.08,house hold disposable income is 2.4anual growth

rate(%),Labor compensation per hour worked is 3.5% annual growth rate, net national income is

19659us dollars/capita

Education

Fig 8, 9

Energy

Fig 10, 11

From above statists it is clearly shows that the primary energy supply and the nuclear plants are more

when compared to Poland Hungary has 0.10 Toe/1000dollars when compare to nuclear plants Hungary

has 4 nuclear power plants and Poland has no nuclear power plants. Crude oil production is 600.0

thousand toe/passenger transport is 70161.0 primary energy supply 0.10 toe/1000US dollars

Environnement

Fig 12

When compare to Poland the carbon emission are 4 tons/capita of 2013 Municipal waste is

385.6/kilograms per capita and water withdrawals 5051.0 million m3

Finance

Fig 13

Here finance is very stable and the investments are good and broad money is 119.36 according to

2010=100,long term interest rates 2.8%per annum, net pension replacements rates 89.6%of pre-

retirement earnings where net pension wealth is8.5 of multiple of annual gross earnings and finally

short term interest rates 0.8% per annum.

Government

Fig 14, 15

Here general government spending are 49.9%of GDP

Government reserves 289424.2 SDR million, Tax cooperate profits 1.5% of GDP,Tax revenue 5355 us

dollars/capita, Tax wedge 49.0%of labor cost

Health

Fig 16, 17

 Innovation and Technology

Fig 18

Gross domestic spending on R&D 1.4% of GDP

ICT value added 7.4%of value added, Internet access 75.6% of all households

Triadic Patent Families 43.4 number wireless mobile broadband subscriptions 34.4per 100 inhabitants

Jobs

Fig 19,20

Averages wages 19999.0 us dollars, Employment rate 65.6% of working age population, Hours

worked 1749 hours/worker, Long-term unemployment rate 46.77%of unemployment, Self-

employment rate 10.9% of employment.

Society

Fig 21

Fertility rates 1.41 children/woman

National population distribution 17.5 percentage

Permanent immigrant inflows, Poverty rate 0.10 ratio, Social spending 22.1%of GDP

Gross domestic product

Fig 22

Gross domestic product is 3.1% projected growth rate 25596 us$ per capita

Tax on personal income

Fig 23

Tax on personal income 5% of total GDP

Unemployment Rate

Fig 24

When compared to Poland the un employment is more in Hungary, Unemployment is 6.8%of labor

force.

Conclusion

There are twenty indicators, which help to understand Business environment of Hungary

Surface area is a territory of a particular country, which divided from others by international

boundaries and belongs to a specific person, group, nation, state, country, and so forth,

and it must be protected and defended against other persons, groups, nations, or

states.

Population is amount of people, who has the status of citizens of one country, town, etc. or a

group of individuals of the same species that live together in a defines area.

Domestic credit provided by financial sector is all available credits, which are available to the

public. Time required to start a business is a period of time, in which owner have to solve all

questions and make his business legal.

Exports of goods and services is a total value of all goods and services which were produced in

the country and provided abroad to the rest of the world and may include the value of

merchandise, freight, insurance, transport, travel, royalties, license fees, and other services,

such as communication, construction, financial, information, business, personal, and

government services.

Imports of goods and services it is buying from other countries their goods and services and

also may include the value of merchandise, freight, insurance, transport, travel, royalties,

license fees, and other services, such as communication, construction, financial, information,

business, personal, and government services.

Energy use is indicator, which show how many electricity is used by capital or population of

the particular territory.

Gross domestic product or GDP is a amount of gross value added by all local producers and

taxes, and it’s equal to consumption, fixed and inventory investment, government expenditures

on goods and services, exports minus imports.

GDP growth is yearly percentage growth rate of Gross domestic product at market prices based

on continuous native currency.

Military expenditures includes all current and capital expenditures on the armed forces, which

allows to defend country military space activities.

Unemployment rate is percentage of people, who are out labor force, which means they are

without work but available for and seeking employment.

Inflation measures by annual growth rate of Gross domestic product, which displays how price

change in the economy as a whole. Also. It defines a ratio of GDP in current local currency to

GDP in constant local currency.

Revenue is simple income and profit, and count as a sum of fines, fees, rent, income from

property or sales and grants.

Tax revenue mentions to fines, penalties, and most social security contributions. Taxes on

income is a percentage which government withdraw from individuals, on the profits of

corporations and enterprises, and on capital gains.

Consumer Price Index is the average price of a basket of goods and services purchased by

consumers on one country.

Net national income counted as net national product minus taxes.

Wholesale price index refers to a price of different stages of production and distribution of

good or service, and also includes import duties.

Insurance and financial services coversine different ways everything, that was protected by

them officially, and somehow was damaged.

Foreign direct investment refers to direct investments which comes from abroad, and it may be

in a form of money, physical capital or other ones.

In the conclusion, the aim of the research paper was to provide a comparative analysis of the business

environment in Hungary with a help of indicators, which describes the country from different

economic and geographic sides. All data was taken from the authorized sources like and compared

between the different sources.