DEVELOPMENT OF THE HUNGARIAN-UKRAINIAN ECONOMIC RELATIONS IN 2011
Ukraine is an important economic partner of Hungary. In 2011, Ukraine ranked 15th based on bilateral trade volume. She was the 13th biggest export market of Hungarian goods, and the 2nd biggest outside the EU after the Russian Federation but before the US and China. The volume of Hungarian exports strongly correlate with the growth of the Ukrainian GDP – after the significant contraction in 2009, it has consolidated quickly and surpassed the record 2008 level in 2011. External trade, investment and tourism data shows that last year was one of the best years from the perspective of economic relations.
The bilateral trade in goods in 2011 was 3632.4 million (M) USD, which is 29.8% growth compared to the previous year. Hungarian exports grew by 18.1% up to 2269.4 M USD, while imports increased even more significantly by 56.6% to 1363 M USD. The significant Hungarian trade surplus vis-à-vis Ukraine remained constant. Last year the surplus decreased by approximately 100 million USD but was still at the level of 906.4 M USD.
Bilateral trade covers a wide range of goods, the biggest part belonging to the machinery and equipment category, which implies that the biggest part of the turnover is realized through transactions inside and between the supply chains of transnational companies.
87.4% of Hungarian exports and 66.8% of Hungarian imports belonged to high value-added manufactured products, which shows that the export structure is modern. Machinery and equipment accounts for 53% of Hungarian exports with a value of 1207.2 M USD – the growth in 2011 was 17%. Other manufactured goods also have a significant export role with 676.2 M USD (34.2%), dominated by medicines (30%). Hungarian agricultural exports (189 M USD) accounts for 8.3%. Although raw materials (20.5 M USD, 0,9%) and mineral fuels (76,5 M USD, 3,3%) have little weight in the Hungarian export, there was a significant increase in both categories.
2011 saw record increase in Hungarian imports from Ukraine (+492 M USD). The only year since Ukrainian independence with a higher Ukrainian import share was 1995. Due to the restarting of Ukrainian electricity exports towards Hungary, the import share of energy carriers increased by 230 M USD to 16.9%, while manufactured goods accounted for 21% (285 M USD).
Due to the increase in energy imports, the import proportion of other trade categories decreased: in case of machinery and equipment to 46.8% (638.3 M USD), and raw materials to 14.1% (192.2 M USD), regardless of their 152.4 M USD (+31.4%) and 41.7 M USD (+27.7%) increase in absolute terms compared to 2010, respectively.
While Hungarian agricultural imports are not significant – they only account for 1.2% of all imports with 16.9 M USD – there was a considerable increase (+209%) in this product group due to an increase of imports in vegetables and fruits (+5.5 M USD) as well as in sugar, sugar preparations and honey (+7.2 M USD).
According to the data of the Ukrainian Statistics Agency, there was no considerable change in the trade in services to the previous year: the Hungarian export in services valued 52.3 M USD (+1.6%), while imports valued 223.9 M USD (+0.1%).
Hungary plays a continuously prominent role among foreign investors in Ukraine. At the end of the year the volume of Hungarian investments was 686,1 M USD, which is a 2% decrease compared to the previous year, but still ranks 10th among EU countries in terms of investment (1,5% of all investments) right after Poland (875,5 M USD, 1,7%). Important Hungarian investors are OTP Bank, Wizz Air, Skala Energy, Fornetti, KÉSZ, and from earlier times Pannonplast, Dunapack and Szabolcs Gabona.
Programs, trade development promotion
In Gyula, 27-28 January 2011, a Hungarian-Ukrainian Agricultural and Food Industrial Fair and business meeting was organized by the local self-government of Gyula and the Békés County Assembly. A Ukrainian delegation of 45 people from Kirovohrad, Vinnytsia and Zakarpattya oblasts met the most important food industry actors in the region.
The National Foreign Economic Office helped 15 companies to participate on the 5th Regional Construction Fair in Uzhhorod, 4-7 May, 2011. On the second day of the exhibition, an economic forum and business meeting was organized, which enhanced the success of the Hungarian participants. 18 Hungarian and 58 Ukrainian companies participated at the event.
The exhibition Inprodmash 2011 was organized between 11 and 13 September, 2011. The presence of 13 companies was organized by HITA. The Hungarian-Ukrainian Chamber of Commerce also participated and represented another 7 companies.
Ukrainian businessmen visited Budapest and Székesfehérvár on 14-18 November, 2011. The visit was organized by the Luhansk Oblast Chamber of Commerce. The delegation met the representatives of regional chambers, the management of HITA and participated in business forums in both cities.
Governmental and institutional relations, events of economic diplomacy
Ferenc Kovács, mayor of Nyíregyháza visited Zakarpattya oblast on 9 March, 2011 and met the leaders of the cities Uzhhorod, Mukachevo and Berehove. They agreed on the revitalisation and development of multidimensional cooperation. Cultural exchange programs and sharing of Hungarian experience on urban management have good perspectives.
A 7-member delegation from the Ukrainian state road transport authority Ukravtodor visited Hungary on 18 April 2011. The Ukrainian experts met their colleagues from the Hungarian State Motorway Management Ltd. (ÁAK).
State Minister for rural development Zsolt V. Németh visited Kyiv on 2-3 June 2011 with an expert delegation. The purpose of the visit included participation at the AGRO 2011 exhibition, which is the annual show of the Ukrainian agricultural sector. They also visited the 2nd International Agricultural Investment Forum.
The 4th meeting of the Hungarian-Ukrainian Intergovernmental Mixed Committee for Cross-Border Cooperation was held in Uzhhorod, 28-29 September 2011. The committee paid special attention to the issuance of Hungarian visas, the situation at common border crossing points, and the preparation of the agreement on controlling road and rail border traffic. The committee also discussed cooperation on tourism, environment and emergencies as well as the situation of common projects under the ENPI program.
After a pause of many years, the second meeting of the Hungarian-Ukrainian Mixed Committee on Economic Cooperation was organized in Odessa, 28-29 November, 2011. The committee meeting was successful according to both sides. Many questions, which have long been on the agenda, were discussed at by high-level officials, especially in key sectors of cooperation like energy, transport, agriculture and finance. The committee meeting was coupled with a business forum with the participation of more than 20 Hungarian companies.
Contact:
Economic Office of the Embassy of Hungary
István Cserepes – 1st counsellor
Head of office, economic affairs
Viktor Berki – 3rd secretary
Economic affairs
01034 Kijev,
Vul. O. Honchara 26., korp. 2., office 87
Tel.: +38 044 545-80-16, 545-80-17
Fax: +38 044 545-80-18
E-mail: kiev@hita.hu