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Productivity indicators remain below the EU average, presenting a key growth opportunity. The Hungarian National Bank (MNB) identified labor productivity, innovation, digitalization, and eco-efficiency as critical pillars for improvement in its latest report, which examines data up to October 2024.
While digitalization has shown progress in the 2020s, other areas lag. Director András Balatoni stressed that addressing these issues is vital, particularly as global megatrends such as demographic shifts and the green transition demand efficient resource use.
Labor productivity has been most affected by recent crises, with growth slowing to 0.8% annually from 2020 to 2023, down from 3.3% in the preceding years.
This modest rise, driven by the services sector, leaves Hungary’s productivity among the lowest in the EU and below regional averages, underscoring the need for improvement.
Innovation has also faced setbacks. Declining business spending has reduced patent and design activity, with Hungary’s innovation system efficiency at just 55% of the EU average.
Meanwhile, digitalization efficiency has improved, driven by corporate efforts, yet domestic utilization of digital infrastructure remains underdeveloped.
Hungary’s eco-efficiency is its strongest pillar, scoring 81% of the EU average, but further progress, such as increasing renewable energy use, is necessary.
By addressing these challenges, the country can unlock growth, reduce inflation, and strengthen its competitiveness. The MNB’s report provides a roadmap for enhancing productivity, contributing to the central bank’s broader mandate.
Via MTI; Featured Image: Wikipedia