Government Launches Initiative for 150 New Factories to Revitalize Industry
Government Aims to Boost Industrial Recovery with 150 New Factories
According to the latest data from the Hungarian Central Statistical Office (KSH), industrial production in March 2025 remained unchanged compared to the previous year, although when adjusted for working-day effects, it indicated a decrease of 5.4%. The Ministry for National Economy highlighted that seasonally adjusted industrial output saw a slight increase of 0.1% compared to February 2025.
Key sectors such as transport equipment, as well as computer, electronic, and optical products, showed growth compared to March 2024. However, the ministry noted that external challenges, particularly the ongoing economic difficulties in Germany, are hindering the performance of Hungary’s export-driven economy.
"The European Union’s long-standing economic policies have been detrimental, particularly while substantial funds are directed to Ukraine," the ministry stated. It reiterated its commitment to achieving robust economic growth amid these challenges.
In response to these obstacles, the government has rolled out the ‘100 New Factories’ initiative, which has now expanded to 150 factories aimed at energizing domestic industry and boosting investment activities. This program is expected to play a vital role in enhancing economic performance and supporting local businesses and job creation.
Additionally, Germany’s planned €500 billion infrastructure investment could stimulate external demand for Hungary’s economy, further aiding recovery. The government is prioritizing support for micro, small, and medium-sized enterprises (SMEs) through its 21-measure New Economic Policy Action Plan. The Demján Sándor Program allocates HUF 1,400 billion (approximately €3.5 billion) for non-reimbursable grants and soft loans aimed at increasing SME productivity.
To further promote investment, the "1+1 Investment Incentive" program has been launched, providing HUF 50 billion (€123 million) in non-reimbursable funding to support Hungarian SMEs. In its initial phase, the program will distribute nearly HUF 28 billion (€690 million) to 300 companies, particularly those in less developed regions, to ensure that investment promotion goes hand in hand with rural development.
Furthermore, substantial investments from major companies, including CATL, BYD, BMW, SEMCORP, and EcoPro, are anticipated to invigorate Hungary’s industrial sector. The ministry also pointed to strong domestic demand and positive economic trends as supportive factors: employment rates are high, with nearly 4.7 million people employed and an exceptionally low number of registered job seekers. Real wages have been experiencing significant growth for the past year and a half, and domestic tourism is expected to set new records in 2025, following a robust performance in 2024.
In summary, while Hungary faces external challenges, proactive government initiatives and strong domestic factors aim to pave the way for recovery and growth in the industrial sector.
