During the election campaign, Péter Magyar pledged to prioritise the creation of high value-added jobs, while gradually sending home guest workers from third countries and favouring Hungary’s domestic labour reserves. Yet employers insist that foreign workers remain indispensable. According to labour market expert Gábor Csizmadia, the core problem is that the issue has become heavily politicised, conflated with migration, despite the fact that without guest workers entire sectors of the economy would falter, placing Hungarian businesses under severe strain.
Job protection or growth risk?
The Tisza government’s first major labour market decision has already sparked a fierce debate among economic stakeholders. While the cabinet argues the measure is designed to protect Hungarian workers, employers and economists warn that halting the inflow of guest workers could exacerbate an already acute labour shortage — and potentially dampen economic growth.
In recent years, the Hungarian economy has grown increasingly reliant on foreign labour. Across industry, logistics, construction and parts of the service sector, many firms have struggled to recruit sufficient Hungarian workers, turning instead to employees from third countries. Employment levels have hovered near historic highs, while domestic labour reserves are largely exhausted. Experts argue that certain vacancies simply cannot be filled locally. Although statistics show a pool of working-age unemployed, integrating them into the labour market would require time and resources — with no guarantee of quality or precision, unlike, for instance, Filipino workers, whose reliability is widely praised by employers.
Guest workers — but not as before
From June 6, the issuance of new residence permits for guest workers has effectively been suspended, as the government has not designated any third countries whose citizens would be eligible (Georgia, Armenia and the Philippines having been removed from the previous list). The move has shut down the primary channel through which labour agencies had brought workers into Hungary in large numbers. The government maintains that the aim is to protect Hungarian jobs and wages. Tisza has repeatedly stressed it will not allow foreign workers to displace Hungarian employees or suppress wage growth.
However, the measure appears inconsistent in practice. As reported yesterday, non-EEA nationals may still obtain residence permits for employment purposes — meaning, for example, that additional Chinese workers can continue to arrive at Chinese-owned factories, as these companies organise recruitment directly without intermediaries.
Growth at risk
Mr Csizmadia warns that the new regulations could intensify labour shortages, potentially curbing Hungary’s GDP growth. If companies cannot secure sufficient staff, they may scale back production, delay investment, or even relocate developments abroad. This is particularly striking given that neighbouring countries employ far higher proportions of third-country workers: around 25 per cent in Austria, 10–15 per cent in Poland and the Czech Republic, compared with just 2.5 per cent in Hungary. In his view, the issue has been deeply politicised, with the public increasingly conflating legally employed, temporary guest workers with illegal migrants.
The Tisza government, however, does not appear to be pursuing a total shutdown. Officials say a comprehensive review is under way, with plans for a stricter system more closely aligned with economic needs. The cabinet has also highlighted ambitions to reignite growth, mobilise the domestic workforce, and strengthen the competitiveness of Hungarian small and medium-sized enterprises.
In the coming months, it will become clear whether tighter controls on guest workers will genuinely expand opportunities for Hungarian employees — or instead act as a brake on growth at a time when many sectors are already grappling with labour shortages.
Bloodbath in Debrecen: guest worker nearly beheaded
