Page 57 - CE Outlook Regions 2022

including Audi, Daimler, Suzuki, which were forced to bring
forward maintenance work or shut down for weeks. The vehicle
sector’s output could exceed HUF10 trillion for the first time this
year despite the global supply chain issues.

The government continued its opening to the East policy,
prioritising eastern investments. 2021 will be the third consecutive
year when most foreign investments have been made by Chinese
or South Korean companies. Hungary has attracted €4.5bn of
new FDI investments in 2021, supported by €548mn in grants.

The automotive industry remains the backbone of the Hungarian
economy, employing 155,000 and accounting for 30% of total
manufacturing output. More than 90% of output goes for export.

The largest investment of the year came from South Korean
EcoPro BM, which is to open its first European factory unit
outside Korea from a €720mn investment.

Disruptions in global value chains in global value chains and the
shortage of semiconductors have resulted in mounting cost
pressure on companies. Factory gate prices surged to a 24-year
high in October.

3.3.4 Energy & power

The expansion of the Paks nuclear power plant with two 1,200
MW new blocks is at least five years behind schedule as the
general contractor Rosatom has yet to obtain the final permit,
failing to meet EU standards. Question marks loom over the
future of Hungary’s largest investment ever, costing €12.5bn
based on the 2014 Russian-Hungarian intergovernmental
agreement, as opposition parties plan to terminate the project if
they take power in 2022.

Extending the lifetime of the power plant, accounting for roughly
half of the country’s electricity production, could be a viable
solution.The spread of renewable energy continued in 2021,
making up the second pillar of the country’s energy strategy.

The number of feed-in tariff solar-powered homes climbed over
100,000. Including the roughly 20,000 businesses with solar
panels participating in the scheme. Total built-in capacity of the
panels exceeded 1,000 MW at the end of Q3 2021. Capacities in
the first six months grew at the same pace as in 2020 alone.
Hungary’s national energy strategy targets a 90% target for
carbon-neutral domestic electricity generation by 2030. The
number of households with an average of 4 kW of roof-mounted
solar power could reach 200,000 at the end of the decade.

57 CE Outlook 2022 www.intellinews.com