OECD Economic Surveys: Hungary 2016

130 Pages·2016·3.765 MB·English

by  Oecd Organisation For Economic Co-Operation And Development

OECD Economic Surveys O
E
C
HUNGARY D
E
c
o
n
SPECIAL FEATURES: BOLSTERING BUSINESS INVESTMENT; ENHANCING SKILLS o OECD Economic Surveys
m
FOR THE LABOUR MARKET ic
S
u
r
v
e HUNGARY
Most recent editions ys
Australia, December 2014 Israel, January 2016
Austria, July 2015 Italy, February 2015
Belgium, February 2015 Japan, April 2015
Brazil, November 2015 Korea, June 2014
Canada, June 2014 Latvia, February 2015
Chile, November 2015 Lithuania, March 2016
V MAY 2016
China, March 2015 Luxembourg, March 2015 o
Colombia, January 2015 Mexico, January 2015 lu
m
Costa Rica, February 2016 Netherlands, March 2016 e
Czech Republic, March 2014 New Zealand, June 2015 2
0
Denmark, May 2016 Norway, January 2016 16
/
Estonia, January 2015 Poland, March 2016 1
0
Euro area, April 2014 Portugal, October 2014
European Union, April 2014 Russian Federation, January 2014
Finland, January 2016 Slovak Republic, November 2014
France, March 2015 Slovenia, May 2015
Germany, April 2016 South Africa, July 2015
Greece, March 2016 Spain, September 2014
Hungary, May 2016 Sweden, March 2015
Iceland, September 2015 Switzerland, November 2015
India, November 2014 Turkey, July 2014
Indonesia, March 2015 United Kingdom, February 2015
Ireland, September 2015 United States, June 2014
H
U
N
G
Consult this publication on line at http://dx.doi.org/10.1787/eco_surveys-hun-2016-en. A
R
This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases. Y
Visit www.oecd-ilibrary.org for more information.
Volume 2016/10 ISSN 0376-6438
2016 SUBSCRIPTION
May 2016
(18 ISSUES)
ISBN 978-92-64-25594-4 M
10 2016 10 1 P a
y
2
0
1
6
102016101cov.indd 1 02-May-2016 10:49:55 AM

OECD Economic Surveys:
Hungary
2016
This document and any map included herein are without prejudice tothe status of or
sovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundaries
andtothenameofanyterritory,cityorarea.
Pleasecitethispublicationas:
OECD(2016),OECDEconomicSurveys:Hungary2016,OECDPublishing,Paris.
http://dx.doi.org/10.1787/eco_surveys-hun-2016-en
ISBN978-92-64-25594-4(print)
ISBN978-92-64-25595-1(PDF)
ISBN978-92-64-25605-7(epub)
Series:OECDEconomicSurveys
ISSN0376-6438(print)
ISSN1609-7513(online)
OECDEconomicSurveys:Hungary
ISSN1995-3461(print)
ISSN1999-0529(online)
ThestatisticaldataforIsraelaresuppliedbyandundertheresponsibilityoftherelevantIsraeliauthorities.Theuse
ofsuchdatabytheOECDiswithoutprejudicetothestatusoftheGolanHeights,EastJerusalemandIsraeli
settlementsintheWestBankunderthetermsofinternationallaw.
Photocredits:Cover©ImageSource–Fotolia.com
CorrigendatoOECDpublicationsmaybefoundonlineat:www.oecd.org/about/publishing/corrigenda.htm.
©OECD2016
Youcancopy,downloadorprintOECDcontentforyourownuse,andyoucanincludeexcerptsfromOECDpublications,databasesand
multimediaproductsinyourowndocuments,presentations,blogs,websitesandteachingmaterials,providedthatsuitable
acknowledgementofOECDassourceandcopyrightownerisgiven.Allrequestsforpublicorcommercialuseandtranslationrightsshould
[e-mail]hotocopyportionsofthismaterialforpublicorcommercialuseshallbe
addresseddirectlytotheCopyrightClearanceCenter(CCC)[email protected]çaisd’exploitationdudroitdecopie(CFC)
[email protected].
TABLEOFCONTENTS
Table of contents
BasicstatisticsoftheHungary,2014 .......................................... 7
Acronyms ................................................................. 8
Executivesummary......................................................... 9
Strongeconomicgrowthhasreturned ..................................... 10
Investmenthasstartedtopickup......................................... 10
Low-skilledhaveweaklabourmarketoutcomes............................. 10
Assessmentandrecommendations........................................... 13
Resuminginclusivegrowth............................................... 14
Therecoveryisbroadening............................................... 16
Bolsteringbusinessinvestment ........................................... 37
Enhancingskillstoboostgrowth ......................................... 46
Bibliography............................................................ 51
Annex:Progressinstructuralreform....................................... 53
Thematicchapters
Chapter1.Bolsteringbusinesssectorinvestment ............................... 57
Introduction............................................................ 60
Investmenthasfallenduetoalackofopportunitiesandfinancing ............ 60
Businessinvestmenthasbeenheldbackbylackofprivatefunding ............ 65
ThelargeinflowofinwardFDIhasreflectedfavourablepolicysettings ......... 69
Astrongerandmorepredictableregulatoryenvironment
wouldbolsterbusinessinvestment........................................ 73
Furtherinvestmentinrenewableenergyisneededtoachievepolicyobjectives.. 86
Bibliograhpy............................................................ 89
Chapter2.Enhancingskillstoboostgrowth .................................... 93
Economicrestructuringhaschangedthelabourmarket’sskillrequirements .... 94
Mobilisingunderusedskills............................................... 98
Securingfutureskillsformationthatmeetlabourmarketneeds............... 110
Bibliography............................................................ 122
Boxes
2.1. TheJobProtectionActtopromoteemploymentgrowth ................... 102
2.2. Newactivelabourmarketpolicymeasures.............................. 106
2.3. Earlytrackingintheeducationsystem ................................. 114
2.4. Changesinthesecondaryeducationsystem ............................ 117
OECDECONOMICSURVEYS:HUNGARY2016©OECD2016 3
TABLEOFCONTENTS
Tables
1. Macroeconomicindicatorsandprojections.............................. 16
2. PossibleshockstotheHungarianeconomy.............................. 26
3. Fiscalindicators..................................................... 31
4. Long-termprojectionsforageingrelatedspending(%ofGDP).............. 35
5. BenefitratiosandreplacementratesinEurope .......................... 37
1.1. Thecorporatesectorhasahighlevelofdebtleverage..................... 63
1.2. Feed-in-tariffsforrenewableenergyin2016(HUF/kWh)................... 86
1.3. Feed-in-tariffsfortariffsinEurope..................................... 87
2.1. PayablepublicchargesofemployersofferedbytheJobProtectionAct....... 103
Figures
1. Growthhasrecoveredrecently ........................................ 14
2. Incomelevelsarestilllow............................................. 15
3. Growthhasresumed................................................. 15
4. Macroeconomicimbalancesarefalling ................................. 17
5. Well-beingindicatorsaremixed ....................................... 18
6. Monetarypolicyhasbeeneasing....................................... 19
7. Exportmarketgainsreflectimprovedcompetitiveness.................... 20
8. Investmentisrecovering.............................................. 21
9. Labourproductivityhasfallenmarkedlysincethecrisis .................. 22
10. Totalfactorproductivityremainslow................................... 22
11. Thelabourmarketisimproving........................................ 23
12. Publicworkschemeshaveunderpinnedtheexpansionofemployment ..... 23
13. Thelabourmarketlacksinclusiveness.................................. 24
14. Minimumwagesarehighrelativetomedianwages ...................... 25
15. Labourshortageshavebeenincreasing................................. 26
16. Monetarypolicytransmissionishinderedbyahighshare
ofnon-performingloans.............................................. 27
17. Macro-financialvulnerabilitieshavediminishedsignificantlysince2007.... 28
18. Financialsectorvulnerabilityhasdeclined.............................. 29
19. Durablyreducingpublicdebtwillrequirefurtherreforms................. 31
20. Hungary'spublicsectorisrelativelylargeandtilted
towardsgeneralpublicservices........................................ 33
21. Taxrevenuesarereliantonconsumptiontaxes
andsocialsecuritycontributions ...................................... 34
22. VATrevenuelossduetotaxavoidanceandevasionisabovetheEUaverage... 34
23. Demographicprospectsareunfavourable ............................... 36
24. Investmentislowerthanexpected..................................... 37
25. Hungary'sparticipationintheglobalvaluechains(GVC)isveryhigh ....... 39
26. Manysmallandmedium-sizedenterprises(SME)
havelowproductivityandinnovativeactivity............................ 40
27. ProductmarketregulationisbelowaverageintheOECD.................. 41
28. Energypricesarehighforfirmsandlowforhouseholds .................. 43
29. Telecommunicationpricesarehighforhigh-usageconsumers............. 44
30. Emissionintensityisdeclining ........................................ 45
31. Theroomforfurtherexpansionintertiaryeducationremainshigh......... 46
32. Theimpactofmotherhoodonemploymentisveryhigh .................. 47
4 OECDECONOMICSURVEYS:HUNGARY2016©OECD2016
TABLEOFCONTENTS
33. StudentperformanceinPISA2012hasdeteriorated ...................... 49
1.1. Investmentispickingup.............................................. 61
1.2. Realbusinessinvestmentcontractedrelativelymore
thaninmanyothercountries ......................................... 62
1.3. Investmentdevelopmentislowerthanexpected......................... 63
1.4. TrendsofforeigndirectinvestmentinHungary.......................... 64
1.5. Stockmarketcapitalisationislow...................................... 65
1.6. Venturecapitalisrelativelywelldeveloped.............................. 66
1.7. Banklendingrateshavedeclined ...................................... 66
1.8. Credithasfallenamidsthighsharesofnon-performingloans ............. 67
1.9. Hungary'sparticipationintheglobalvaluechains(GVC)isveryhigh ....... 70
1.10. Foreign-ownedfirmsaresubstantialinvestorsintangiblecapital .......... 71
1.11. Intangiblesaccountforalowshareofinvestment........................ 72
1.12. Changingsectoralcompositionhasaffectedaggregateinvestmentintensity ... 73
1.13. FactorsattractingFDIhavebecomesimilaracrosstheregion .............. 74
1.14. Regulationishighinsomeareas....................................... 75
1.15. Energypricesarehighforindustryandlowfordomesticconsumers........ 82
1.16. RegulationburdeninretailtradeisabovetheOECDaverage............... 83
1.17. Telecommunicationpricesarehighandinfrastructureislackingbehind .... 84
1.18. Relativelyfewhouseholdshaveaccesstoacomputerathome............. 85
2.1. Structuralchangeinemployment...................................... 95
2.2. Theroomforfurtherexpansionintertiaryeducationremainshigh......... 96
2.3. Educationhasnotbeenresponsivetolabourmarketsignals............... 97
2.4. Labourshortagesarebecomingmorepronounced........................ 98
2.5. Femaleemploymentratesarelowatbothendsoftheagedistribution...... 99
2.6. Motherstendtowithdrawfromthelabourmarket....................... 100
2.7. ParentalleaveinHungaryislong ...................................... 100
2.8. Enrolmentinformalchildcareremainslow ............................. 101
2.9. Thepart-timefamilymodelisrarelyusedinHungary .................... 102
2.10. Thelesseducatedhavelowerchancesoffindingajob.................... 105
2.11. Publicworkschemejobsarepredominantlyinregions
withhighlong-termunemployment ................................... 106
2.12. Labourmarketstatus6monthsafterparticipatinginpublicworkschemes.. 107
2.13. Emigrationislow,buthasbeenincreasingsignificantlyoverrecentyears ... 109
2.14. StudentperformanceinPISA2012hasdeteriorated ...................... 111
2.15. TeachersareamongstthelowestpaidintheOECD....................... 112
2.16. Computerskillsandlanguageproficiencyareweak ...................... 113
2.17. Schoolenrolmentandgraduationratesofminoritygroupsremainpoor
inHungary ......................................................... 114
2.18. Vocationalschoolsareperceivedtobeoflowquality ..................... 116
2.19. Labourmarketoutcomesofvocationalschoolgraduatesareunsatisfactory.. 116
2.20. Graduationratescanbesignificantlyincreased
throughraisingcompletionrates ...................................... 119
2.21. Differenceinincomeandlabourmarketoutcomesbyfieldofeducation .... 119
2.22. PrivatereturnsontertiaryeducationarehighinHungary................. 120
2.23. Studentsarenotenteringfieldswherelabourmarketdemandishigh ...... 121
OECDECONOMICSURVEYS:HUNGARY2016©OECD2016 5
This Survey is published on the responsibility of the Economic and
Development Review Committee of the OECD, which is charged with the
examinationoftheeconomicsituationofmembercountries.
The economic situation and policies of Hungary were reviewed by the
Committeeon30March2016.Thedraftreportwasthenrevisedinthelightofthe
discussionsandgivenfinalapprovalastheagreedreportofthewholeCommitteeon
13thApril2016.
The Secretariat’s draft report was prepared for the Committee by JensHøj and
GabrielMachlica from the OECD secretariat, and EditHuszár, seconded from the
HungarianMinistryoftheNationalEconomy,underthesupervisionofPierreBeynet.
Statistical research was provided byTaejinPark with general administrative support
provided by AnthonyBolton. The previous Survey of Hungary was issued in
January2014.
InformationaboutthelatestaswellaspreviousSurveysandmoreinformation
abouthowSurveysarepreparedisavailableatwww.oecd.org/eco/surveys.
Follow OECD Publications on:
http://twitter.com/OECD_Pubs
http://www.facebook.com/OECDPublications
http://www.linkedin.com/groups/OECD-Publications-4645871
http://www.youtube.com/oecdilibrary
OECD
Alerts http://www.oecd.org/oecddirect/
This book has... StatLinks2
A service that delivers Excel® files from the printed page!
Look for the StatLinks2at the bottom of the tables or graphs in this book.
To download the matching Excel® spreadsheet, just type the link into your
Internet browser, starting with the http://dx.doi.org prefix, or click on the link from
the e-book edition.
BASICSTATISTICSOFTHEHUNGARY,2014
(NumbersinparenthesesrefertotheOECDaverage)a
LAND,PEOPLEANDELECTORALCYCLE
Population(million) 9.8 Populationdensityperkm2 105.8 (34.9)
Under15(%) 14.4 (18.1) Lifeexpectancy(years,2013) 75.7 (80.5)
Over65(%) 17.6 (16.0) Men 72.2 (77.8)
Foreign-born(%,2013) 4.5 Women 79.1 (83.1)
Latest5-yearaveragegrowth(%) -0.4 (0.6) Latestgeneralelection April2014
ECONOMY
Grossdomesticproduct(GDP) Valueaddedshares(%)
Incurrentprices(billionUSD) 139.4 Primarysector 4.5 (2.5)
Incurrentprices(billionHUF) 32373 Industryincludingconstruction 31.2 (26.9)
Latest5-yearaveragerealgrowth(%) 1.3 (1.9) Services 64.4 (70.6)
Percapita(000USDPPP) 24.9 (39.0)
GENERALGOVERNMENT
PercentofGDP
Expenditure 49.5 (42.3) Grossfinancialdebtb 99.0 (114.4)
Revenue 47.3 (38.5) Netfinancialdebtb 71.3 (72.6)
EXTERNALACCOUNTS
Exchangerate(HUFperUSD) 232.2 Mainexports(%oftotalmerchandiseexports)
PPPexchangerate(USA=1) 132.0 Machineryandtransportequipment 54.1
InpercentofGDP Manufacturedgoods 10.5
Exportsofgoodsandservices 88.7 (53.8) Chemicalsandrelatedproducts,n.e.s. 10.4
Importsofgoodsandservices 81.5 (49.8) Mainimports(%oftotalmerchandiseimports)
Currentaccountbalance 2.3 (0.0) Machineryandtransportequipment 44.5
Netinternationalinvestmentposition -65.2 Manufacturedgoods 13.6
Mineralfuels,lubricantsandrelatedmaterials 12.1
LABOURMARKET,SKILLSANDINNOVATION
Employmentratefor15-64year-olds(%) 61.8 (65.7) Unemploymentrate,LabourForceSurvey(age15andover)(%) 7.7 (7.3)
Men 67.8 (73.6) Youth(age15-24,%) 20.4 (15.0)
Women 55.9 (57.9) Long-termunemployed(1yearandover,%) 3.8 (2.5)
Participationratefor15-64year-olds(%) 67.0 (71.2) Tertiaryeducationalattainment25-64year-olds(%,2013) 22.5 (33.3)
Averagehoursworkedperyear 1858 (1770) GrossdomesticexpenditureonR&D(%ofGDP,2013) 1.4 (2.4)
ENVIRONMENT
Totalprimaryenergysupplypercapita(toe) 2.3 (4.1) CO2emissionsfromfuelcombustionpercapita(tonnes,2013) 4.0 (9.6)
Renewables(%) 8.5 (9.1) Waterabstractionspercapita(1000m3,2012) 0.6
Fineparticulatematterconcentration(PM2.5,µg/m3,2013) 15.8 (13.8) Municipalwastepercapita(tonnes,2013) 0.4 (0.5)
SOCIETY
Incomeinequality(Ginicoefficient)c 0.288 (0.308) Educationoutcomes(PISAscore,2012)
Relativepovertyrate(%)c 10.1 (10.9) Reading 488 (496)
Medianequivalisedhouseholdincome(000USDPPP,2010) 9.3 (20.4) Mathematics 477 (494)
Publicandprivatespending(%ofGDP) Science 494 (501)
Healthcare,currentexpenditure(2013) 7.4 (8.9) Shareofwomeninparliament(%,November2015) 10.1 (27.8)
Pensions(2011) 10.5 (8.7) Netofficialdevelopmentassistance(%ofGNI) 0.11 (0.36)
Education(primary,secondary,postsec.nontertiary,2012) 2.6 (3.7)
Betterlifeindex:www.oecdbetterlifeindex.org
a)WheretheOECDaggregateisnotprovidedinthesourcedatabase,asimpleOECDaverageoflatestavailabledataiscalculatedwhere
dataexistforatleast29membercountries.
b)2013fortheOECDaggregate.
c)2012fortheOECDaggregate.
Source: Calculationsbasedondataextractedfromthedatabasesofthefollowingorganisations:OECD,InternationalEnergyAgency,
WorldBank,InternationalMonetaryFundandInter-ParliamentaryUnion.
ACRONYMS
Acronyms
ALMP Activelabourmarketpolicies
EBRD EuropeanBankforReconstructionandDevelopment
EEA EuropeanEconomicArea
FDI Foreigndirectinvestment
FGS FundingforGrowthScheme
GDP Grossdomesticproduct
GNI grossnationalincome
GSP GrowthSupportingProgramme
GVC Globalvaluechain
ICT Informationandcommunicationstechnology
MARK HungarianRestructuringandDebtManagementLtd
MFB HungarianDevelopmentBank
MVM Electricitycompany
MVNO Mobilevirtualnetworkoperator
OLAF EuropeanCommission'sAnti-FraudInvestigationOffice
R&D ResearchandDevelopment
RIA RegulatoryImpactAssessments
SME Smallandmediumenterprise
VAT Valueaddedtax
VET vocationaleducationandtraining
8 OECDECONOMICSURVEYS:HUNGARY2016©OECD2016