Hungary is one of the first three EU countries to ratify the Vietnam - EU Free Trade Agreement (EVFTA), agreeing to promote trade and investment cooperation and fully and effectively implement the trade deal.

Despite the significant impact of the COVID-19 pandemic, total annual import-export turnover between the two countries reached more than US$1 billion for three consecutive years (2020, 2021, 2022). In particular, Vietnam topped Southeast Asia in exports to Hungary for three consecutive years (2020, 2021, 2022).

Trade exchanges between Vietnam and Hungary fell considerably in 2023 due to the latter’s economic stagnation coupled with the impact of the prolonged Russia-Ukraine military conflict. Statistics show their two-way trade nosedived 22% year on year last year to approximately US$900 million.

Given the fall, some major agricultural export products of Vietnam gained a firm foothold in the Hungarian market, with cashew nuts accounting for over 40% of the market share, cinnamon 18%, coffee 13.8%, rice 6%, and pepper 5%.

Rice was a typical agricultural item that secured high export growth in this market. In the first 10 months of 2023 alone, Vietnam raked in US$2.7 million from rice exports to Hungary, an increase of 174% over the same period in 2022, with its market share rising triple from nearly 2% in 2022.

In addition, electronic components recorded the highest proportion of Vietnamese exports to Hungary in recent years.

However, the Ministry of Industry and Trade warned that Hungary’s import demand for electronic components would decrease in 2024 due to the prolonged impact of the post pandemic period, plus the ongoing conflict between Russia and Ukraine that has caused supply chain disruptions. Furthermore, local people would continue to tighten their belt due to economic recession and high inflation, causing consumer demand to tumble.

Above all, Vietnamese Ambassador to Hungary Nguyen Thi Bich Thao expressed her belief that the Hungarian economy would soon recover, and the economic and trade ties between Vietnam and Hungary would soon gather steam thanks to both sides’ efforts to bring into full play opportunities from the EVFTA.

VOV