National Currency

Hungarian Forint (HUF)

Exchange Rate

1 EUR = 309.13 HUF (2017-06-23)

During the last 11 years EURHUF exchange rate was within the range 231.26 - 317.06, reaching its maximum in Jun 2016 and falling to its minimum in Jul 2008.

GDP

According to Eurostat, nominal GDP of Hungary in 2016 was 112.4 bln EUR.

Hungary outperforms the European Union in terms of real GDP growth with the average annual differential coming to 1.0% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 2.0% which was above the Euro Area average (1.8%) and above the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.

In 2016, nominal GDP per capita in Hungary was 11 500 EUR.

Hungary has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -20.8% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2022 are IMF's estimates.

Inflation Rate

According to Eurostat, inflation rate in Hungary in 2016 expressed as annual percentages of average consumer prices was 0.4% which was above the Euro Area average (0.2%) and above the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.

Unemployment Rate

Government Bond Yield

According to Eurostat, government bond yield in Hungary in Mar 2017 was 3.48%, compared to 3.52% in Feb 2017.

Credit Ratings (as of Sep 2016)

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding Tax Rates in Hungary: 0.0 - 16.0%

Withholding tax rates applied on payments of interest and dividends in Hungary are shown in Table 1.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of Hungary: 77 Signed Agreements

Hungary signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

There are also several agreements between Hungary and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

• spontaneously;
• on request;
• automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Exchange on Request: 2 Signed Agreements

Hungary signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

There are also several agreements between Hungary and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):

Automatic Exchange: Starts in September 2017

Hungary signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Further Information

• Automatic Exchange of Information on Financial Accounts
• Countries Which Will Not Automatically Exchange Account Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

Hungary has FATCA agreement with the U.S. in effect since 04 February 2014 (Intergovernmental Agreement Model 1). Financial institutions operating in Hungary are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Hungarian financial accounts hold in U.S. financial institutions will be reported to Hungarian authorities.

Further Information

• FATCA and European countries

Financial Market Development

According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Hungary is scored 4.0 out of maximum 7.0 and ranked 70th out of 138 analysed economies. Soundness of banks is scored 3.9 bringing Hungary into the 114th place, trustworthiness and confidence of financial market is scored 4.2 (71st place).

Deposit Guarantee Scheme

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

• if the depositor is eligible within the terms of the deposit guarantee scheme;
• if the depositor's bank is a participant in the deposit guarantee scheme;
• if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Hungary are summarised in Table 2.

EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.

EEA currencies are all official currencies of EEA members. Switzerland is not a EEA member, but because CHF is the official currency of Liechtenstein, CHF also belongs to EEA currencies.

So, only the deposits made with Hungarian banks in the following currencies are covered by the deposit guarantee scheme of Hungary

EUR	Euro
BGN	Bulgarian lev
CZK	Czech koruna
DKK	Danish krone
HUF	Hungarian forint
ISK	Icelandic króna
CHF	Swiss franc
NOK	Norwegian krone
PLN	Polish złoty
RON	Romanian new leu
SEK	Swedish krona/kronor
GBP	Pound sterling

It should be also noted that deposits in non-EEA currencies (for example, USD and JPY) are not covered by the Hungarian deposit guarantee scheme.

Further Information

• Deposit Guarantee Schemes in Europe

Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local currency (Hungarian forint) deposit ceiling for Hungary is set to Baa2 (lower medium grade), foreign currency deposit ceiling is Ba2 (non-investment grade speculative).

Deposit Rates

In Feb 2017, an agreed annualised deposit rate in local currency (Hungarian forint) of new contracts with agreed maturity up to 1 year between credit institutions and households was 0.40% .

Banking Sector Structure

Currently there are 101 credit institutions operating in Hungary.

In 2015 consolidated banking assets in Hungary were 102.64 bln EUR. The consolidated banking assets' evolution is shown at Chart 8 below.

Recent structural changes (2013 - 2016) of the banking sector of Hungary are summarised in Table 3.

The list of the most recently opened banks in Hungary is provided in Table 4.

All the credit institutions operating in Hungary can be classified into several categories. Table 5 summarises the number of banks in each category.

There are 9 branches of foreign banks from 7 different countries in Hungary. Table 6 shows the number of branches grouped by the country of origin.