Frequent policy changes are holding back an improvement in the environment for doing business in Hungary, the European Commission said in an overview of competitiveness in all 27 member states on Wednesday.
"Frequent changes in policy and in the legal and institutional framework have created an unpredictable economic environment for Hungarian enterprises," the Commission said in the overview. "While there have been positive developments in some areas, increased competitiveness requires a stable and predictable economic policy framework," it added.
The Commission acknowledged a slight increase in labour productivity in Hungary after the crisis, but said cost competitiveness had still deteriorated over the last decade. Credit conditions -- especially for SMEs -- are tight, the level of innovation is low, there is weak competition in many services, and the effectiveness of public administration is low, the Commission said, outlining challenges facing Hungary's industrial competitiveness.
The Commission said further efforts are also needed to reform the public administration and to reduce administrative burdens.