The US gives the most investment aid globally, but Hungary is also a generous donor.

fDiIntelligence has recently published interesting data on the investment support given by governments to domestic and foreign investors.

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We have compiled the published data in a table for better readability and comparability.

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2022 was a record year for investment grants, 77% higher than 2021. The electronics industry, including semiconductor and battery manufacturing, pulled up the numbers. Almost half of the aid went to this sector. This increase highlights the global competition for investment, where the US distributed over three times as much aid as the EU Member States combined.
This huge amount of money intensifies the process set in motion by the US Inflation Reduction Act. Namely, the luring of European companies, especially manufacturing companies, to the US. This trend has been given a further boost by the EU Green Deal Industrial Plan.

The figures are also worth studying. For example, where investment is large volumes but makes relatively few jobs, presumably high-value, highly automated, high-tech investment is supported. In contrast, where more jobs are created, the attraction of advanced technology has likely been less of a consideration.

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Unsurprisingly, Germany tops the list among EU Member States. Hungary, however, is a surprise in more ways than one. The amount of investment supported there is almost as much as in Germany, but the number of jobs created is four times higher than in Germany! The amount of aid the Hungarian government gives is almost 1/3 of the total amount granted by all EU Member States! These figures are well above average compared to countries with economies of similar size.

The UK has given far less aid than the EU for the size of its economy. This does not represent a trend because the UK government is committed to making the country attractive to investors. The details of the Spring Budget show this. In it, significant investment grants and R&D tax breaks were announced. I wrote about these in a previous post.

fdi incentives szamok reszletes UK

Remember, these figures are not just about grants to foreign investors! They also include incentives for domestic firms. Also, keep in mind that the figures here are not total investments in each specific country but only those subsidised by the state.