Executive Search in Hungary – 2019 Outlook
Former Leader Trailing In CEE
GDP Growth in 2018 is expected to slow slightly but remain strong at 4%+. Unemployment is the lowest ever, varying between 2% -3% depending which part of the country
The state budget deficit is currently below 2% and state debt has been reduced to 70-% of GDP from 78% when the current government took over in 2010. Inflation is slowly growing is 2%+.
Export/Import balance continues to be positive due to automotive OEMs and other industries.
In the past eight years macroeconomic stabilization has been fuelled by EU fundings and taxation (profit 9%, personal income 15%)
Foreign Direct Investment has picked up over the last two years FDI picked up, and both years (2017-18) brought record high investment. Beside the additional investments of corporates in the country (Audi, Mercedes, Bosch, Thyssen-Krupp etc) newcomers already announced for 2019-2020 include BMW, Giant (Taiwanese-based bicycle) and UFLEX , India’s largest flexible packaging company.
Despite this encouragement, if we look back to the 1990-2000 period, Hungary was a frontrunner in economic development and in GDP/capita, salaries and consumption in comparison with other CEE countries such as Czechia, Slovakia and Poland. Today, it is last among them in all economic-statistical figures.
A general election in April was won by Viktor Orbán’s Fidesz with a 2/3 majority due to the weakness of opposition parties and lack of alternative. There are question marks whether the election was clear and fair, but as of today no evidence has come up to prove the opposite.
The disgraceful ongoing anti-migrant, anti-refugee and anti-Soros campaigns by the government in the last three years have resulted in a high number of populist votes. The governing party, benefitting from improving macroeconomic figures, instead of consolidation is aggressively abusing its 2/3 majority by introducing controversial new laws creating growing tension in the country.
The government modified the jurisdiction system by establishing a separate court for state related cases and the appointment of judges is now finally approved by the Ministry of justice.
Centralized corruption has never been this high. Only circles close to the PM are winning public procurements, and EU-funded large projects are similarly managed, creating an anti-market economy.
The three main challenges ahead for Hungary are a shortage of labour in the production sector with growing salaries, a low level of productivity in locally owned companies, and relatively low level of large-scale innovation. While multinationals are producing with high productivity levels, local companies are lagging far behind.
Search / Recruitment
Despite a shortage in the labour force, experienced managers and leaders are available on the market. The recruitment business is becoming more and more commoditized, with freelancers, ex-HR people and many small companies involved.