“Frequent changes in policy and in the legal and institutional framework have created an unpredictable economic environment for Hungarian enterprises,” the Commission said in the overview released on Wednesday evening.
“While there have been positive developments in some areas, increased competitiveness requires a stable and predictable economic policy framework,” it added.
The EC acknowledged a slight increase in labour productivity in Hungary after the crisis, but said cost competitiveness had still deteriorated over the last decade.
Credit conditions — especially for SMEs — are tight, the level of innovation is low, there is weak competition in many services, and the effectiveness of public administration is low, the Commission said, outlining challenges facing Hungary’s industrial competitiveness.
The Commission said further efforts are also needed to reform the public administration system and to reduce administrative burdens.
Using three indicators (countries with balanced, and unbalanced output, and the emerging group) for comparing industrial competitiveness of the 27 member states, the EC report listed Hungary within the group of emerging countries that face grave challenges. These countries are Bulgaria, Romania, the Czech Republic, Poland, Hungary, Slovakia, Latvia and Lithuania.