Hungary - Country with the highest share of Outsourcing | NASSCOM
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Hungary - Country with the highest share of Outsourcing

 Hungary is divided into seven important regions according to the European Union’s NUTS classification. Economic activity and population are strongly concentrated in Hungary’s central region (including Budapest). Almost half of the GDP is produced in that area, using about one third of the employed workforce (where production is led by the services area); moreover, this region has attracted two thirds of foreign direct investments in the last decade.

Western regions of the country (Western and Central Transdanubia) are currently the most rapidly developing. A great number of foreign multinationals has established subsidiaries in these regions, mainly in custom-free zones. Most of these companies are involved in manufacturing, mainly in the car industry and engineering. Northern and Eastern regions (the Great Plain) are less developed and are slower than the Western ones.

Influenced by the global economic downturn, the volume of GDP contracted by 6.3% in 2009. The demand for investments fell in almost all economical sectors; the corporations have made only the most necessary investments due to changes in the offer of financing and partly to the decrease in the external and domestic demand. The economic impacts of the crisis seem to be longer; the country does not appear ready to recover before 2011, when GDP growth is expected to reach about 3.2%.

In order to better show the current situation on the Hungarian market, a comparison with the Western European markets is most appropriate. According to Pierre Audoin Consultants (PAC) estimates, the IT services business (Hardware Maintenance, Project Services, Outsourcing) represents 24% in total IT expenditure (similar with the share in Czech Republic – the most mature IT market in Easter Europe region) versus a median level of 34% in Western Europe.

Hungary remains notably behind the Western European average, with only 96 Euros spent on Software and IT Services-SITS per head as opposed to 431 Euros per head in Western Europe. Czech Republic spends 171 Euros per head, also significant ahead of Hungary, but still quite behind the Western countries.