Hungary is a founding member of the World Trade Organization (WTO), and member of the European Union since the 1st of May 2004.

Foreign trade is vital for the country, as Hungary is an extremely open economy - the degree of openness (ie. the share of exports in the GDP) is around 70%. This fact is not only due to the size of the economy, but also to an open and active economic and trade policy.

Hungary’s central location makes it a useful bridgehead for transit trade between East and West, and a convenient initial basis for working the markets in the old and new EU member, as well as the countries included in the next round of EU enlargement (Balkan states, Croatia, Turkey).

The dynamic growth of exports in the past decade was mainly due to the settlement of multinational companies in Hungary. Over 70 percent of the country’s exports are produced by partly or fully foreign-owned companies. Substantial foreign investment had flown into Hungary, and the mid-90s witnessed massive export drive. The turnover of foreign trade increased annually around 20%. The growth rate of exports and imports slowed down in 2007 (6%) while in 2008 it reached only 3.4% due to the crisis. Export is expected to decline in 2009 due to the economic downturn in destination markets especially in Germany.

The trade balance of the country is usually negative, although in 2007 and 2008 the balance improved significantly. The geographical structure of Hungarian foreign trade has completely changed in the past 15 years: almost 80% of foreign trade is carried out with European Union countries, while previously a similar percentage went to the former socialist countries. In 2008 the top customers of Hungary were Germany (26%), Italy (5.3 %), Austria (5 %), France (4.7 %), the United Kingdom (4.5%) followed by Sweden and the Netherlands, each with 3-4 %. The top suppliers included Germany (25%), the Russian Federation (9%), Austria (6%), China (5.7%), the Netherlands (4.5%), France (4.4%) and Japan with 2.6%.

The sectoral structure of the Hungarian exports and imports has also changed significantly: in exports the proportion of machinery products increased from 21% to 60.5 % (2008) including telecommunication equipments (18.3%), vehicles (11%), electronic equipments (10.3%), and power generating machinery (8.9%). Manufactured goods were at second place with 26.6 % including pharmaceuticals and chemicals. Exports of fuels and electric energy have remained 2-3%.  The proportion of agricultural and food products, as well as raw materials fell continuously during the past years, they currently represent together less than 9 %. The share of agricultural and food products accounted for 7 %.

In imports, machinery and equipment had the biggest share with 49%, including electrical machinery with 14%, telecommunications equipments 10% and vehicles (automotive components) 9%. One third of all imports is manufactured goods, and another major important product group to Hungary includes fuels (13%).