NGM: weak German economy limits domestic industry’s performance

By: Trademagazin Date: 2025. 03. 06. 11:40

The competitiveness problems of the European Union and the economic crisis in Germany are limiting the export-driven Hungarian economy, including the performance of industry. The government aims to increase economic performance, and to this end it is launching the “100 new factories” program, which will significantly contribute to the recovery of domestic industry – this is how the Ministry of National Economy (NGM) commented on the industrial statistics data published on Thursday in a statement sent to MTI.

They cited data from the Central Statistical Office (KSH), according to which the volume of industrial production in January 2025 decreased by 3.9 percent compared to the same period of the previous year, adjusted for calendar effects, while the performance of industry increased by nearly 1 percent compared to the previous month. In the first month of the year, the production of computer, electronic and optical products, among the most important sub-sectors, expanded.

According to the NGM, the performance of domestic industry is still being held back by external factors.

They see that

there are more and more signs of a turnaround in the Hungarian economy, and family confidence is gradually improving. This is reflected in the dynamic real wage growth that has been going on for 16 months, the record-high employment, the spectacular expansion of consumption, the surge in household lending, the dynamic increase in the number of housing transactions, the revival of the new and used car market, the increase in construction orders and the soaring domestic tourism

– the NGM listed.

The government is providing special support to domestic micro, small and medium-sized enterprises within the framework of the new economic policy action plan consisting of 21 measures. The Sándor Demján Program helps improve the productivity of Hungarian SMEs with 1,400 billion forints of resources, including non-refundable subsidies, preferential loans and a capital program, thereby also contributing to the strengthening of industry.