The rate of German companies planning to increase investments in Hungary fell dramatically

A recent survey of the German-Hungarian Chamber of Industry and Commerce (DUIHK) found that the rate of companies planning to increase investments in Hungary fell to only 16%. 30% is the rate of those enterprises that would halt investments. That is the worst figure since 2010.

According to portfolio.hu, only 78% of the German entrepreneurs active in Hungary said that they would come to Hungary to invest. That figure was 80% last year and 88% four years ago.

Poor marks to state of the Hungarian economy

Businesses in Hungary are adapting to an uncertain environment, a survey by the German-Hungarian Chamber of Industry and Commerce (DUIHK) shows, the Hungarian News Agency said. Around 52pc of respondents gave poor marks to the state of the national economy, while 44pc said it was satisfactory. Looking ahead, 44pc augured a deterioration and 42pc said the situation would remain stable. Just 14pc augured an improvement.

Assessments of Hungary’s economic policy have worsened since 2022, with respect to predictability, legal certainty and corruption, said DUIHK head András Sávos. Addressing government measures such as a cap on markups, he added that the chamber’s position was that long-term interests shouldn’t be sacrificed for short-term goals. Asked about their own businesses, 28pc of respondents delivered positive assessments, 49pc neutral assessments and 23pc poor ones. Gauging outlooks, the survey showed 26pc expected improvement and 25pc saw business getting worse, while 46pc expected no change.

Sávos noted that the survey of 236 companies had been conducted after the February 23 German elections, but did not reflect the impact of the announcement of the United States’ tariff measures. Dirk Wolfer, the chamber’s communications director said businesses did not expect accelerated economic growth or a marked pickup in exports. Around 30pc expect to scale back investment spending, he added.

Companies said demand was their biggest risk, followed by payroll costs, economic policy and legal certainty. Responses indicate the labour shortage has eased. Around 78pc of companies said they would invest in Hungary again.

Wolfer said German companies had ploughed an annual EUR 2bn-3bn into upgrades or capacity expansions in Hungary for more than ten years. In 2022, German-owned businesses employed over 220,000 people, locally, he added.

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