The Hungarian defence market is small in comparison to other European states. After the effects of war and occupation, independent Hungary had little in the way of advanced weapons manufacturers. The industry is dominated by privately owned SMEs, which have weak demand domestically and often diversify into the civilian segment out of necessity. Such firms produce ammunition, defence electronics and some light vehicles, which necessitates the importation of more advanced hardware. The recently announced Zrinyi 2026 plan - alongside earlier commitments to increase defence spending by 0.1% of GDP per annum - will create opportunities for domestic firms where possible if fully implemented. However, a number of big-ticket purchases have already been made with international firms, underlining the Hungarian defence industry's inability to produce more high-value hardware. Moreover, we maintain a level of scepticism in relation to spending increases.

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