Overview
The digital economy currently accounts for 6.7% of Hungary’s overall gross value added (GVA) production with an estimated value of USD 31.5 billion in 2025, including in-house digital developments in the manufacturing industry, consumer electronics and financial service providers. Digital technology spans every conceivable sector in Hungary from traditional tech sectors like cybersecurity and telecoms to health, energy, and even consumer goods and food delivery. The mid-term outlook is positive as the pandemic accelerated the momentum for digital transformation and cloud adoption in the private and public sector. Leading sub-sectors include cloud computing, Big Data, IoT, quantum and cybersecurity.
Hungary’s digital economy is specialized primarily in ICT manufacturing of electronic components and boards, magnetic and optical media and communication equipment, computers and peripheral equipment. These are among the highest shares of ICT manufacturing recorded in any of the European Union (EU) Member States. The Association of Digital Companies (IVSZ) is the largest and most significant interest group of this industry in Hungary. It is dedicated to implement and spread the importance of the digital economy and contribute to the digital transformation of the country.
In the public sector, the main stakeholder for digitalization include is DMU – Digital Hungary Agency, the strategic body for digitalization, established in 2022, and reports to the Cabinet Office of the Prime Minister. DMU is responsible for the entire Hungarian government’s IT. Additionally, the Ministry for National Economy covers strategies concerning the use of information and communication technology including broadband policies. These fall under the responsibility of the deputy state secretariat for technology, space and defense industry within the ministry.
The Hungarian government adopted a National Digitalization Strategy 2022-2030 in 2022 which is aligned with the EU’s Digital Decade Policy Program. The strategy is structured around the four main pillars of the Digital Decade Compass measured in Digital Economy and Society Index (DESI). These are digital infrastructure, digital skills, digital economy and digital state. Hungary has a very ambitious and challenging aim of exceeding the EU average in digital development by the middle of the decade. The National Digitalization Strategy targets 95% coverage of households with gigabit networks and 90% usage of e-government services, as well as aims to increase digital skills of the population and to support digitalization of business processes, among others. The Hungarian Government’s objective is for Hungary to be among the top 10 performing EU countries in the field of digitalization by 2030.
The digital infrastructure is already mature in Hungary, but the digital skills need to be further improved in order to exploit the full potential of digitization. Despite recent progress, Hungary continues to face digital skills gaps, leaving parts of the population more vulnerable to online risks and less equipped to benefit from digital transformation. While the digital infrastructure is very good, the country still lags behind in the digitalization of businesses. Although progress was made, opportunities offered by digital technologies have not been fully exploited by most Hungarian enterprises.
There is room to increase the use of enterprise resource planning software to share information electronically, to rely on social media or send e-invoices. The situation is similar for advanced technologies, such as 5G coverage, AI, cloud and big data, while access to e-Health records is above the EU average. AI adaptation, as a new wave of digitization, will be a drive to improve productivity. Hungary has an adopted national Artificial Intelligence strategy covering the period 2020-2030, with an updated regulatory framework introduced in 2025 aligned with the EU AI Act. The strategy focuses on building a safe, transparent, and innovative AI ecosystem across society, business, and technology. Hungary performs well with broadband connectivity and is one of the leaders with 37% of households subscribing to 1Gbps broadband service in 2024 compared with 18% in the EU.
Hungary’s roadmap contains 44 measures with a budget of USD 3 billion (EUR 2.489 billion), comprising USD 2.1 billion (EUR 1.822 billion) from public budgets (equivalent to 0.88% of GDP). Hungary plans to use EU funding for broadband infrastructure deployment in rural regions. However, the EU continues to withhold some USD 22 billion (EUR 19 billion) of funding amid disputes over the rule of law in the country. In Hungary’s Recovery and Resilience Plan (RRP) 30% of its allocation i.e. USD 1.98 billion (EUR 1.7 billion) is devoted to digital measures, of which USD 1.4 billion (EUR 1.2 billion) is contributing to the Digital Decade targets. The RRP plan includes a comprehensive package to promote the digital transformation of the economy and society with measures on digital transition. Hungary has plans to improve the digital equipment and skills in its primary, vocational and higher education institutions. The RRP plan also contains measures related to the digitalization of public administration and of the health, transport and energy sectors.
Hungary’s overall digital skills are good, with a particularly strong showing among the young people and those with higher education. The challenges lie in reducing the digital divide between urban and rural areas and improving the skills of those with lower levels of formal education or being unemployed. With targeted efforts in these areas, Hungary could further improve its standing in digital skills. The Hungarian government’s focus on digitalization is expected to boost spending on information technology, especially in the manufacturing industry, cybersecurity and government sectors. Development and investment in Hungary’s technology industry will be spurred by the adoption of new technologies.
EU law takes supremacy over national laws and as such most regulations for its digital economy are set at the EU level rather than in Hungary.
Hungary has been a full member of the European Space Agency (ESA) since 2015, with more than 250 Hungarian scientists and engineers currently engaged in ESA research and development projects. Building on this foundation, Hungary continues to strengthen its participation in international space exploration initiatives. Under the national space industry development program HUNOR (Hungarian to Orbit), the country achieved a major milestone when a Hungarian astronaut traveled to the International Space Station (ISS) in June 2025. Hungary’s first formal National Space Strategy, released in 2021, outlines key objectives: enhancing domestic capabilities in space technology and innovation to drive economic growth; strengthening international cooperation and diplomatic engagement with leading space nations such as the United States, China, and Israel; and developing knowledge-based infrastructure to support sustainable growth of the national space ecosystem.
Hungary’s space diplomacy has expanded rapidly through bilateral partnerships and memoranda of understanding with countries including France, Portugal, Turkey, Israel, Brazil, and Singapore, building on its long-standing ESA membership and historically strong ties with Russia. Hungary became a signatory of the Artemis Accords in 2025. Cooperation with Russia dates to the Soviet era, when the first Hungarian astronaut flew to the MIR Space Station in 1980. Hungary also maintains active cooperation with China, engaging in joint research, education, and technology exchange. In July 2024, Hungary joined the PRC–Russian-led International Lunar Research Station (ILRS) project, aimed at building a permanent lunar base by around 2035.
From 2018 to 2023, the Ministry of Foreign Affairs and Trade (MFAT) oversaw national space policy and programs. Following recent administrative changes, the Ministry of National Economy now manages most space-related activities, while the HUNOR astronaut program remains under MFAT’s supervision.
In parallel with these government-led initiatives, space commerce has become one of the fastest-growing segments of Hungary’s space sector. A new generation of startups and private companies—specializing in small satellite components, data analytics, and remote sensing—are turning Hungary’s scientific expertise into global commercial success. These firms actively collaborate with ESA, EU space programs, and regional industry clusters to provide products and services for both public and private clients. The country’s National Space Strategy supports this trend, emphasizing innovation, dual-use technologies, and international cooperation.
Two companies stand out in Hungary’s emerging space economy. 4iG Group, through its subsidiary CarpathiaSat Zrt. (a partnership with Antenna Hungária and New Space Industries), is developing Hungary’s first commercial geostationary satellite, scheduled for launch in 2026. The satellite will provide broadcasting, internet, telephony, data transmission, and research services, marking a milestone in Hungary’s commercial space operations. Meanwhile, REMRED Ltd. is leading the country’s space manufacturing and testing capability through its REMTECH facility in Martonvásár. This state-of-the-art center will feature clean rooms (ISO-5 to ISO-8), environmental test chambers for vibration, EMC, and thermal vacuum testing, and will support full satellite subsystem and payload qualification in accordance with European space standards.
Together, these developments position Hungary as an agile and increasingly influential player in Europe’s evolving space economy—combining international partnerships, scientific heritage, and commercial innovation to strengthen its presence in the global space industry.
Market Challenges
U.S. companies face several notable market challenges in Hungary’s digital economy. Hungary’s digital economy is highly regulated and complex. This complexity stems in part from the slight differences between EU and national laws. Many of these EU regulations are also new and thus not yet fully implemented. Consequently, navigating this opaque and fragmented regulatory environment can be a challenge especially for startups and small and medium-sized enterprises (SMEs) with limited financial resources.
Government influence is strong, especially in sectors like telecommunications and cloud, with market consolidation around government-allied firms; this diminishes competition and can disadvantage foreign firms. There is a continuing consolidation trend among telecom operators with Hungary’s telecoms and IT group, 4iG assuming leadership in several markets and significantly improving its position across both the mobile and fixed segments while also expanding abroad, acquiring telecoms companies in Montenegro, and Albania and a satellite operator in Israel. Increased local competition – including state-supported or allied companies – and lower-cost regional competitors make market entry and expansion more costly and complex for U.S. firms.
On Transparency International’s Corruption Perception Index, Hungary was ranked last among Member States within the European Union for the third year in a row. On the global scale of 180 countries, this placed Hungary 82nd, dropping one point from 2023 and six places lower than the previous year. International companies doing business with the Hungarian government report poor transparency in bureaucratic processes. Corruption is perceived by businesses surveyed for the Perceptions Index report as widespread in courts, government contracting and public procurement.
Hungary does not share the same concerns about security as the U.S., which may make it challenging for U.S. companies to participate in digital technology deployment in the market. The current government has close commercial and political ties with Russia and China and will allow equipment originating from those markets to be used in the digital economy. Technology and network equipment from non-EU providers (notably Huawei/China) are not considered a security risk resisting U.S. warnings and potentially complicating access for U.S. technology suppliers seeking to avoid sensitive supply chains.
Decisions related to the digital economy are made at several ministries and authorities, no single entity is assigned for digitalization, creating a lack of clarity in the industry. There is no real dialog about the digital development of Hungary on a strategic level due to the fragmented decision-making framework. The private sector faces challenges in finding the relevant stakeholders. Besides the Digital Hungary Agency reporting to the Cabinet Office of the Prime Minister, the non-exhaustive list of stakeholders on digitalization include the Ministry for National Economy, the National Broadcasting and Information Technology Council (NHIT), the Digital Government Agency (DKU) which is responsible for IT Procurement, the Ministry of Foreign Affairs and Trade, the Central Bank of Hungary (MNB) and the National Cybersecurity Institute (NBSZ / NKI) which is responsible for the re-drafting of the law governing IT security, etc.
IT security laws (Law 50 or Law L) under the narrative of data sovereignty are very restrictive regarding the use of Public Cloud services. The regulation restricts sensitive data to be stored and processed within the territory of Hungary (while under the regulation of the EU, it would be sufficient to keep and process data withing the EU). Proper data classification would help because already public data (like the website contents of a government office) could be stored and processed in public cloud, however most players are afraid of complications and therefore threat all their data the same, i.e. keeping them within Hungary and on their on-premises data centers.
Other barriers to U.S. companies entering Hungary’s digital economy might include that many public services are still not available online. There was substantial progress on the demand side of e-government, however the quality and completeness of the supply of digital public services for both people and businesses remained relatively low, especially for cross-border service provision, which is key to achieving the Digital Decade target for all key public services to be fully online by 2030.
While projected growth in digital economy means considerable opportunities for both established players and emerging companies, potential restraints could include infrastructure limitations in certain regions, the need for skilled IT professionals, and the ongoing challenges associated with data privacy and security. The shortage of skilled IT professionals creates wage pressure and makes it harder for companies to scale and support digital transformation initiatives.
The United States 2025 Investment Climate Statements for Hungary for Hungary outlines additional barriers to U.S. goods and services in Hungary, including in areas related to its digital economy.
Most laws are set at the EU level. The Digital Economy Chapter of our Country Commercial Guide for the European Union provides a more comprehensive overview.
Opportunities
The digital economy can become the engine of the entire national economy: the introduction of new technologies (5G, IoT, AI, blockchain, cloud, etc.) would result in an annual GDP surplus of almost HUF 4,000 billion (USD 11.8 billion) in mid-term, which is almost 10% of the GDP. There could also be significant opportunities derived from the EU recovery investment strategy, which has a major digital element.
Hungary allocates 29% of its total recovery and resilience plan to digital. In addition, under cohesion policy, 12% of the country’s total cohesion policy funding, is dedicated to advancing Hungary’s digital transformation. Altogether, EUR 2.9 billion (USD 3.4 billion) directly contributes to achieving EU Digital Decade targets. IT public procurement planning of the various government agencies, ministries and state-owned enterprises is centralized through the Digital Government Agency (DKÜ) for the procurement of IT services and solutions.
The pandemic accelerated trends such as remote work, ecommerce, online content and services consumption – and this will drive IT investments in areas such as cloud computing, cybersecurity, AI and wearables. The adoption of advanced automation solutions has accelerated that utilize robotics, 5G, sensors and machine learning in fields such as autos, manufacturing and logistics creating opportunities for U.S. tech firms. The development of 5G networks in Hungary will open sales opportunities for a wide range of products and solutions, ranging from security solutions and network products to accessories for end-user equipment.
Hungary’s Artificial Intelligence market is projected to reach USD 350.20 million in 2024. It is expected to show an annual growth rate (between 2024-2030) of 28.48%, resulting in a market volume of USD 1.5 billion by 2030. The rise of artificial intelligence has led to a growing demand for advanced automation and smart solutions across various industries in Hungary, thus creating opportunities for U.S. solution providers in these areas. This has resulted in a shift towards more efficient and streamlined processes, as well as a greater focus on data-driven decision making.
The Hungarian cybersecurity market, one of the largest ICT subsectors, is poised for robust growth, with expected annual growth of 12.25% from 2024 to 2029. This growth trajectory, coupled with the immediate need for compliance with NIS2 Directive, a European Union directive that specifies critical infrastructure cybersecurity requirements, presents an ideal opportunity for market entry. Revenue in the cyber solutions market in Hungary is projected to reach USD 105.7 million in 2024.
Opportunities exist for U.S cybersecurity companies providing stronger supply chain security, enhanced network security, better access control and encryption. Because of Russia’s invasion of Ukraine, the overall threat level in cyberspace has increased. Even though the National Cybersecurity Centre (NCSC) is monitoring the government network infrastructure and the Hungarian cyberspace in an increased preparedness mode, Hungary’s defense procurement agency (VBÜ) was attacked by foreign hackers in November 2024, which shows that the Hungarian government is already the target of specialized international groups, targeting high-value, sensitive information.
Hungary is actively involved in developing a national quantum communication infrastructure through projects like QCIHungary, which aims to lay the foundations for a pan-European quantum network. The project includes deploying a quantum communication backbone connecting Budapest with three other Hungarian cities in different directions (Győr, Nagykanizsa, and Szeged), with potential cross-border links to neighboring countries, and developing satellite-based quantum key distribution (QKD) systems supported by European Space Agency (ESA) collaborations.
Key components such as a free-space quantum link, a quantum-capable ground station in Budapest, and a multi-node quantum key distribution network are being implemented, with Hungary launching its first quantum satellite, Eagle-1, scheduled for 2026. This initiative supports Hungary’s goal of creating a secure, state-of-the-art quantum communication network to bolster national R&D, education, and industrial activities, while contributing to broader European efforts in quantum technology. In Hungarian research institutes and universities, nearly twenty internationally renowned research groups are working on projects related to quantum computing. Hungary strives to build a quantum computer by 2027 to support Hungarian education, R&D and industrial activities.
In Hungary, American tech companies are viewed as leaders in the digital economy with key players such as IBM, Microsoft, Google, Apple, Dell, AWS, CISCO, and Oracle having presence on the market. With a strong worldwide reputation for being leaders in innovation and the development of cutting-edge solutions, U.S. companies are well-positioned to compete in the digital technologies market in Hungary.
The U.S. Commercial Service in Hungary can assist in identifying the best suited trade show related to each ICT subsector and industry vertical (AI, Cybersecurity, industrial IT solutions, e-commerce, etc.). The most important Digital Economy-related trade events in Hungary include Hungarian Innovation Week, ITBN, MENTA, TECHXPO and Ecommerce Expo.