2022: Reading the tea leaves for the year ahead


What does 2022 hold for Hungary? Well, an election is certain in the spring and promises to be more interesting than most in a very lopsided past decade. We’ll cover this in more depth closer to the time. The economic chart is of more direct interest for a business publication. The Budapest Business Journal has sifted through announcements and reports to try to get a glimpse of what might befall us. Here is our reading of tea leaves.


The economy will continue to perform well, the government insisted to the surprise of absolutely no one. Finance Minister Mihály Varga said the government’s decisions to postpone some state investments in 2021 and 2022 would not dampen this year’s GDP growth in an interview published in the December 31, 2021 issue of the pro- governmental Magyar Nemzet (Hungarian Nation).

In December, the government decided to reschedule HUF 350 billion of investments due that year and HUF 755 billion this year. The savings allowed the government to reduce the deficit target for 2022 by one percentage point to 4.9% of GDP.

Asked if postponing investment could slow GDP growth, Varga said, “We don’t think so. We continue to expect growth well above 5% in 2022.” The ministry’s official forecast for 2021-2025, released earlier in the week, puts GDP growth for next year at 5.9%.

This is broadly in line with European Union expectations for Hungary. The European Commission will make its next projection for the Hungarian economy in February. Its most recent figures come from the Fall 2021 Economic Forecast, released on November 11, 2021, which puts GDP growth in 2022 at 5.4%. See chart for full breakdown of EC expectations for the Hungarian economy.

government spending

Tied to the state of the economy is the government’s role in targeting funding to what it identifies as key areas, and significant sums have already been announced for spring tenders.

The Ministry of Innovation and Technology announced on January 5 the start of pre-registration for a tender of HUF 10 billion in conditional grants for technology development in green economy enterprises, according to the state news agency MTI. European Union and state funding, provided through the Green National Champions program, can be used to use energy and water more efficiently, support electromobility, obtain raw materials from secondary sources and replace single-use plastics.

Grants are available for amounts between HUF 20 million and HUF 1.5 billion, with a funding intensity rate of up to 50%. Companies with at least three people on the payroll and an annual net income of HUF 30 million or more can apply. The pre-registration deadline is January 19. The tender itself is open from February 10 to 24.

A few days earlier, Finance Minister Varga had announced the launch on January 5 of a HUF 140 billion EU tender and state subsidy for investments in research, development and innovation in companies via, as is so often the case these days, a post on Facebook. . Varga said the funding could be used to develop new products, technologies or services and bring them to market, as well as to experiment, conduct industrial research or acquire equipment.

In another Facebook post, Varga announced that HUF 25 billion has been allocated to support investment by large companies in 2022. Last year, 63 large companies received HUF 50 billion under the scheme, supporting investments totaling HUF 130 billion, Varga said. . Since the 2015 launch of the scheme, which targets companies not eligible for EU funding due to their size, HUF 207 billion in grants have supported 241 investments with a combined value of HUF 510 billion, it said. -he declares. These investments have created nearly 4,000 jobs, he added.


This brings us to another possible bottleneck for Hungarian economic growth, and certainly one that is often mentioned at the BBJ by CEOs: the tightening labor market. As always, this is a two-sided metric: if it’s hard to find employees, it means high employment, and no government in the world will be unhappy about that.

Nevertheless, serious disruptions are to be expected in the Hungarian labor market due to the massive shortage of professionals, warned InfoRádió the general secretary of the National Association of Entrepreneurs, László Perlusz, on January 4.

He also highlighted another burning issue: there are many professions with little supply. There are not enough auto mechanics, parts painters and wallpaperers, while fewer people are learning to become electricians or carpenters. In the opinion of Perlusz, even a significant increase in the minimum wage and the minimum wage for skilled workers will not change this situation.

The national unemployment rate may well remain below 4%, provided the coronavirus pandemic does not cause another shock to the global economy, Zoltán Varga, principal analyst at Equilor Befektetési Zrt., told Világgazdaság. However, he also suggested that rising energy and commodity prices could slow investment expansion, reducing the need for new labor.

Either way, Hungary’s unemployment rate fell to 3.7% in November from 3.9% in October and the same month a year earlier, according to the latest data released by the Central Statistical Office. (KSH) on January 5.

In absolute terms, there were 179,200 unemployed, 9,400 less than in October and 10,200 less than the same month a year earlier. The three-month moving average of the unemployment rate reached 3.6% in November. KSH noted that data from the National Employment Service (NFSZ) shows there were 242,000 registered jobseekers at the end of November, down 18.3% from 12 months earlier.

Given this tight labor market, the pressure on wages will not dissipate any time soon. Retailers Aldi and Spar mirrored what is expected to be a trend across all industries for the year when they announced significant staff increases from early January 2022.

According to portfolio.hu, Aldi Hungary increased the wages of its employees by 8% from January 1, while penzcentrum.hu reported that Spar Hungary announced on January 3 that it would spend 8.6 billion HUF on increases. salary in 2022.

This article first appeared in the print issue of the Budapest Business Journal on January 14, 2022.


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