Hungarian Investment Promotion Agency

Another independent study found that the program responded to the recession with exceptional speed and efficiency.

In early 2020, the coronavirus pandemic threatened to trigger a severe downturn in the Hungarian economy and the loss of a significant number of jobs. As a result, a targeted government support scheme was needed to encourage corporate investments that could still be implemented amid the crisis. The VNT Program helped mitigate the economic slowdown and preserve jobs during the most critical phase of the pandemic, while the investments supported under the scheme also contributed to the post-pandemic economic recovery.

The comprehensive VNT Program, launched under the supervision of the Ministry of Foreign Affairs and Trade with the involvement of the Hungarian Investment Promotion Agency, was ultimately announced three times between April and November 2020 due to overwhelming demand. More than HUF 220 billion in funding was made available.

In total, 922 companies received support, 75 percent of which were Hungarian-owned enterprises. Beneficiary companies implemented investments worth a combined HUF 451 billion and retained over 156,000 jobs. Moreover, nearly three-quarters of the supported companies not only preserved employment levels but also expanded their workforce.

HIPA assessed the long-term impact of the program through a representative survey conducted among 500 companies. According to the survey, 70 percent of supported companies would have reduced headcount or scaled back operations had the funding opportunity not been available. The program’s most significant achievement, therefore, was its indirect contribution to safeguarding the livelihoods and financial security of tens of thousands of Hungarian families during the COVID-19 pandemic.

Ninety-eight percent of surveyed companies stated that the program had delivered clear benefits for their operations. The support also provided momentum for growth, as the investments significantly increased companies’ revenues in recent years. Compared to 2019 levels, nearly one in five companies managed to double its revenue, while more than half reported revenue increases of at least 50 percent.

The survey also revealed that one-third of respondents constructed new facilities through the support received, while three-quarters acquired new equipment thanks to the program. More than 90 percent of the companies surveyed described the application process as smooth and efficient. A similarly high proportion indicated that they are planning future investments for which comparable support mechanisms would be beneficial.

Another independent study also highlighted that, compared with similar programs in other EU member states, the VNT Program responded to the recession with exceptional speed both in terms of launch and disbursement of funding. According to the findings, participating companies experienced a smaller temporary decline in 2020 relative to the broader economic downturn. Furthermore, they were able to increase overall employment levels even during this period, thereby fulfilling the VNT Program’s primary objective.