Hungary, the Region's Biggest Recipient of Israeli Investments

The Israeli official in charge of economic and business relations between Israel and Hungary says the all-time largest volume of bilateral trade between Hungary and Israel, worth USD 514.1 million, was registered in 2008.

Trade relations between Israel and Hungary resumed with the re-establishment of diplomatic relations right after the fall of the socialist regime in 1989. The first official Hungarian government-level visit to Israel happened to be paid by the then minister of foreign trade. Yoram Gilady, the Israeli official in charge of economic and business relations between Israel and Hungary told Diplomacy and Trade that “from a completely insignificant volume of trade before 1989, the bilateral trade has reached USD 154 million in 2001.” After Hungary's accession to the EU in May 2004, the Free Trade Area Agreement between Hungary and Israel was abolished and the Association Agreement between Israel and the EU is in force between Israel and Hungary.

Yoram Gilady has been serving in the position of Minister for Economic Affairs at the Economic Department of the Embassy of Israel in Vienna since August 2006, in charge of three countries: Austria, Hungary and Slovakia. Relating to Hungary, his job is to “follow the situation, understand the needs of economy and demands of companies to be able to advise our business community on what to focus in Hungary. Our other aims include finding investors to and from Israel, promoting Israeli business opportunities in Hungary, as well as tightening the relations between the two countries on a governmental level.We provide information on the Hungarian economic milieu, give advice, help the companies in finding and contacting potential business partners, assist them in organizing meetings and if possible, also do follow up.”

Hungary is the region's biggest importer of capital from Israel. In the last ten years, the economic relations have developed considerably and are particularly noticeable where Israeli investments in Hungary are concerned. Each year, around USD  200-300 million of Israeli investment capital arrives to Hungary, most of which flows to the real estate sector. Other targets of investments are the industrial, infrastructural and R&D sector. Notable industrial investments include the acquisition of Biogal and Human by TEVA pharmaceuticals. Another example is the Israeli jewelery producer Caprice that established a factory in Szentendre investing USD 4 million in 2001. Financial service providers (mostly insurance companies) are also considering entering the Hungarian market.

Israel is among the 20 most relevant trade partners of Hungary. Statistics has registered the all time largest circulation of commodities between the two countries last year, USD 514.1 million. The Hungarian export to Israel was USD 342 million in 2008, an increase of 34.2% on the previous year, mainly consisting of chemical, plastic, pharmaceutical, electronic products, machinery and equipments. The Hungarian import from Israel was USD 172.1 million in 2008, an increase of 44.4%. It consisted mostly of chemical and pharmaceutical products, non-precious metals, machibery as well as telecommunications and ICT related equipments.