PM Orbán talked about a fantastic 2025 concerning the country’s economy and economic growth, but it seems markets do not share his optimism. For example, the American dollar broke another psychological barrier against the forint, while the euro continues to strengthen against the Hungarian national currency.
Gradual forint weakening
According to the Hungarian News Agency, “the forint traded at 415.56 to the euro around 5:30 on Friday evening, softening from 413.64 late Thursday. The forint edged up to 403.53 from 403.67 against the dollar. It slipped to 443.71 from 442.37 to the Swiss franc.”
On Friday, the euro traded at 416.01, which is not far from the 2-year historic low of 19 December 2023. Furthermore, it is not far from the 423.8 low of 8 October 2022. What’s even more troubling is that the forint’s weakening against the common currency has been gradual in the last few months, as you may check out below:
Source: Google
Hungary’s 2025 state budget was calculated with a 397.5 EUR/HUF currency exchange rate.
The American dollar broke a new psychological barrier
The strengthening of the American dollar is also gradual, and on 2 January, it broke another psychological barrier, exceeding 400 USD/HUF. Now, it is trading at 403.24/USD. The historic low was also on 8 October 2022, when the American currency cost 435.57 forints. This week, its maximum was at 405.093.
Source: Google
According to 444.hu, there are multiple reasons behind the weakening of the forint. Some of these are the low Hungarian base rate, the slow Hungarian economic growth, the high budget deficit, the Orbán cabinet’s clashes with the EU, and the lost EU funds. According to Portfolio, the Hungarian economy’s only hope is Trump, who may turn the global economy upside down with new and increased customs and protectionist measures.
There are no regional reasons behind the forint’s fall since it fell against the Polish zloty. On Friday, the zloty traded at 97.432, close to its historic maximum (97.961). Currently, one zloty costs 97.35 forints.
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Is the opening of the Russian chain store Mere in Hungary not so certain after all? – read more HERE
Main goods transport artery, Budapest’s Gubacsi railway bridge, may collapse into the Danube – check out the details and some photos HERE
The European Parliament shared shocking data about the rise in real estate prices in Hungary and the European Union. They found that the increase rate was brutally high in Hungary compared to the EU, where it averaged “only” 48%. The bad news is that experts believe the property price rise will continue this year in Hungary.
Property prices increased most in Hungary in the EU
According to the European Parliament, “in less than 10 years, between 2015 and 2023, house prices in the EU rose on average by 48%. The biggest increase is marked in Hungary, where prices rose 173%, and the lowest in Finland, with just 5%.” The European Parliament found that the highest year-on-year rise in Hungary was between 2021 and 2022. The increase rate was 46% then. Another almost 20% followed between 2022 and 2023, clearly showing the devastating effects of the skyrocketing inflation on Hungary’s economy and society. You may check out further data on the issue by clicking HERE.
Photo: European Parliament
“The main reasons contributing to the rise in prices are higher building costs and mortgage rates, a decrease in construction that limited supply and the rise in the purchase of properties as an investment to generate additional income”, they wrote.
Hungarians leave their parental home above 27
Another interesting fact they shared was the average age when people leave their parental home. The EU average age is 26.3, but that also varies significantly between EU countries, from 21.4 years in Finland to 31.8 years in Croatia. In Hungary, it is 27.1.
Photo: European Parliament
Foreigners buy property in Budapest and the Western counties
According to 24.hu, the number of foreign nationals buying Hungarian real estate is low. Based on the analysis of Otthon Centrum, the Chinese buy property only in Budapest’s downtown, while the Germans focus on Somogy County and the Western counties of Hungary.
Foreigners spend more money on property. The average property price they pay is HUF 51.1 million (EUR 123,000), while Hungarians spend HUF 2 million less. 92% of the foreigners buy property in Budapest and the Western counties of Hungary (Vas, Somogy, Győr-Moson-Sopron, Zala). The highest number of transactions concerning property took place in Budapest’s 8th district, where Americans, Western European and Ukrainian citizens were the most active.
A view of the 6th and 7th districts from the Saint Stephen’s Basilica. Source: depositphotos.com
According to experts, property prices will continue to rise in Hungary in 2025 due to several government measures aiming to pump more money into the sector. Here you may read more about them.
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Good news: 2025 will be a better year in Hungary’s property market, says Duna House
The Gubacsi railway bridge connects Budapest’s 20th and 21st districts, but its importance is much higher than just connecting two areas of the Hungarian capital. Hungary’s only container port is in the Northern parts of Budapest’s 21st district, Csepel. Without the railway bridge, serious disruptions could evolve in goods transport via Hungary, having a devastating effect even in the Central European or German economies.
5 km/h is the permitted speed on the Gubacsi railway bridge
Therefore, it is bad news that Hungarian authorities introduced a 5km/h speed limit on the Gubacsi railway bridge due to its dangerous state. Some media outlets even said the overpass may collapse into the Soroksár arm of the River Danube.
Here are some photos of the state of the bridge:
According to Indóház Online, authorities installed speed-measuring cameras and displays on either side of the bridge. However, the cameras do not function appropriately. From the 20th district, they measure even the speed of the cars, so they are always red. Meanwhile, from the 21st district, they measure the speed of the pedestrians because of which they “are always smiling” green.
As we wrote in THIS article, there were multiple plans to build a new overpass north of the existing one. The brand-new, 145-metre-long bridge could solve the problems of the slow pace that goods transport companies struggle with, but the Hungarian government “could not find” the money for it in the last 2-3 years. The European Union could finance such projects, but since the Orbán cabinet could not agree with the European Commission, those funds remained frozen.
Photo: FB/Szabolcs Szabó
No money for the new Gubacsi railway bridge
In 2023, the Hungarian government planned to build the new railway bridge with Connecting Europe Facility (CEF) funds. The Orbán cabinet said the new connection would reduce the shipping time of military equipment to the Freeport of Csepel and increase Hungary’s military mobility. In 2024, the government allocated HUF 44 billion (EUR 105 million) from EU funds for the construction, but nothing happened.
Based on estimates, 30-40% of Hungary’s industry depends on the Gubacsi Danube Railway Bridge since Hungary has only one container port, the so-called freeport at the northern edge of Csepel Island. If authorities had to end traffic on the overpass, it would cause serious disruptions in goods transport and would have a devastating effect even in the Central European or the struggling German economies.
Photo: FB/Szabolcs Szabó, the MP of the Csepel-Soroksár electoral district.
Read also:
Shocking decline: How Hungary fell behind its neighbours after joining the EU – read more HERE
Hungary lowers guest worker cap, 10 countries on the banned list
The pool of experts at the expanded National Economy Ministry, into which the Finance Ministry has merged, will work to support families and businesses, Márton Nagy, who heads the portfolio, said in a video message on social media on Friday.
Nagy said that his ministry wanted to establish an “outstanding cooperation” with the National Bank of Hungary (NBH).
He noted that Hungary had faced three crises in recent years, the pandemic, the energy crisis caused by the war in Ukraine and now the economic downturn in Germany, but pointed to the impact the government’s new economic policy action plan would have in 2025, lifting wages by 8pc, keeping inflation at 3pc and boosting GDP growth, while the government stuck to an “extraordinarily tight” fiscal policy.
Government measures will boost household incomes, ensure easier access to housing for young Hungarians and promote the faster development of businesses, Nagy said.
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2025 is the year of families and businesses, Hungarian economy minister announces ambitious action plan
The jobless rate in Hungary for people between the ages of 15 and 74 stood at 4.5pc in November, data released by the Central Statistics Office (KSH) on Friday show. Meanwhile, Hungary’s government sector had a HUF 2,110bn deficit in Q1-Q3, equivalent to 3.5pc of GDP. Furthermore, Hungary had a EUR 742m trade surplus in November, a first reading of data released by the Central Statistics Office (KSH) on Friday shows.
In absolute terms, there were 221,000 unemployed. The number of employed reached 4,679,000 in November, down 32,000 from twelve months earlier. For the period September-November, the average number of employed slipped 36,000 to 4,691,000. The number of people employed on the primary market fell 39,000 to 4,517,000. The number of Hungarians working abroad was little changed at 111,000 and the number of people in fostered work programmes was flat at 63,000.
The employment rate for the 15-64 age group edged down 0.3pp to 75.1pc. Data from the National Employment Service (NFSZ) show there were 225,000 registered jobseekers at the end of November, down 0.5pc from twelve months earlier. Jobseekers spent 11.6 months, on average, looking for work, but 49pc of the jobless found new positions in under three months. The percentage of jobless who had been looking for work for at least one year reached 33pc.
Photo: depositphotos.com
Commenting on the fresh data, Sándor Czomba, the state secretary for employment policy, said employment remained stably high during the period and attributed the minimal decline from a year earlier to a high base. Hungary’s employment levels, which exceed the European Union average, contribute to an expansion of consumption and economic growth, strengthening Hungary’s competitiveness, he added.
Hungary government sector deficit reaches 3.5pc of GDP in Q1-Q3, says KSH
Hungary’s government sector had a HUF 2,110bn deficit in Q1-Q3, equivalent to 3.5pc of GDP, preliminary data released by the Central Statistics Office (KSH) on Friday show. Government sector revenue rose 8.0pc to HUF 25,205bn, while expenditures increased 4.0pc to HUF 27,315bn.
Revenue from social insurance contributions climbed 13.8pc to HUF 6,189bn and revenue from taxes on production and imports increased 6.3pc to HUF 10,262bn. On the expenditure side, investment spending fell 10.3pc to HUF 1,865bn, but interest expenditures climbed by 11.0pc to HUF 2,898bn. Alone in the third quarter, the government sector deficit reached HUF 621bn, equivalent to 3.0pc of GDP for the period.
Hungary trade surplus reaches EUR 742m in November
Hungary had a EUR 742m trade surplus in November, a first reading of data released by the Central Statistics Office (KSH) on Friday shows. Exports fell 3.5pc year-on-year to EUR 12.582bn. Imports rose 2.3pc to EUR 11.841bn.
Trade with other European Union member states accounted for 76pc of Hungary’s exports and 72pc of its imports during the month. For the period January-November, Hungary had a trade surplus of EUR 11.110bn. Exports fell 3.9pc to EUR 133.924bn and imports declined 5.5pc to EUR 122.813bn.
Prices at the pump in Hungary were competitive compared to those in neighbouring countries in the month of December, data compiled from the EU weekly Oil Bulletin by the Central Statistics Office (KSH) show, the National Economy Ministry said on Friday.
The price of petrol in Hungary averaged HUF 617/litre during the month, level with the average in neighbouring countries.
The average price of diesel was HUF 633/litre, HUF 3 under the average in neighbouring countries.
According to Menedzsment Fórum, Saturday will bring another round of price increases. From tomorrow, the average petrol price will be above HUF 627/l, while the average diesel price will stand at HUF 646/l.
Illustration: Unsplash / Erik Mclean
Hungary’s government earlier said it would intervene if motor fuel prices exceeded the average in neighbouring countries, MTI wrote.
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Overtaxation? Fuel prices set to rise in Hungary as excise tax hike takes effect 1 January
As of 1 January 2025, two major telecom companies, Vodafone Hungary and DIGI have ceased to exist as separate entities following a merger of the 4iG Group’s telecommunications brands. This consolidation brings Vodafone Hungary, DIGI, Antenna Hungária, and Invitech under a single brand: One.
The transition involves temporary service disruptions for Vodafone Hungary customers between 31 December 2024, at 3:00 PM and 2 January 2025, at 7:00 AM, 24.hu reports. During this period, online services, mobile payment options, the My Vodafone app, and other features, including balance top-ups, data purchases, and toll and parking payments, will be unavailable.
Websites associated with the former brands, such as digi.hu and vodafone.hu, have also been retired, with the new centralised site, one.hu, set to go live soon.
Current customers of telecom giants Vodafone and DIGI need not worry about their services. Contracts and service terms remain unchanged, and there will be no automatic changes to plans or tariffs due to the rebranding.
Vodafone entered the Hungarian market in 1999, and in 2023, 4iG Plc., in partnership with the Hungarian state, acquired the company for HUF 660 billion (EUR 1.60 billion). This latest step signifies a major transformation in Hungary’s telecommunications landscape.
Hungary joined the European Union in 2004 with the aim of catching up or at least approaching the economic and social development of Western European countries. The optimism of the country, then one of the most advanced economies in the region, was well-founded: a network of motorways, a cheap and skilled labour force and infrastructure made Hungary attractive to investors. By tapping into the resources and opportunities offered by the EU, growth and development were a given, at least on paper.
Over the past two decades, the Hungarian economy has grown in terms of numbers, but it has fallen back significantly compared to its competitors. According to Népszava, GDP per capita in purchasing power parity terms has increased by a factor of 2.2, but the country has slipped from 19th to 22nd place in the EU.
It is particularly unfortunate that Romania and Bulgaria, which started out in a much weaker position than Hungary, have now overtaken it in many indicators. In terms of consumption, for example, Hungary fell from second last in 2022 to last in 2023, ahead only of Bulgaria, which has also moved up in the meantime.
Employment and income
The labour market is one of the areas where the Hungarian economy has achieved outstanding results. Employment rates have improved significantly, with the employment rate for the 15-64 age group rising from 57% at the time of entry to 74.4%, making it one of the best performers in the EU.
Wages have also increased significantly: Hungarian wages in purchasing power parity (PPP) terms have increased by almost two and a half times, ahead of Slovakia. However, the picture for pensions is less favourable, with Polish, Romanian and Slovakian pensions also rising faster than Hungarian pensions. Consumption is also on a downward trend: from being the region’s second in 2004, it has fallen to last place in 2022.
Photo: FB/Orbán
Policy mistakes, economic downturn and corruption
The deterioration in Hungary’s economic performance is closely linked to policy failures. Under the MSZP-SZDSZ government, the economy was characterised by loose fiscal policy and indebtedness after accession. Although many infrastructure investments were made, the 2008 financial crisis severely set back the country’s performance. A EUR 20 billion loan from the EU and IMF saved the country from bankruptcy, but recovery has been slow.
After 2010, the Orbán governments adopted an unorthodox economic policy stance that initially dampened growth. Later, growth was artificially stimulated by the central bank and the government pumping large amounts of money into the economy, which produced short-term results but led to higher inflation and structural problems in the longer term. An industry-led economic policy, with a focus on low-value industrial production rather than high-value-added innovation, has also contributed to the regional backwardness.
Corruption and the lack of rule of law have exacerbated the situation. The Orbán governments have often used EU funds inefficiently and established a system of patronage. Rampant corruption has led the EU to suspend a number of EU funds, costing the country billions of euros. In recent years, these policies have not only alienated foreign investors, but also Hungarian businesses, and a growing number of Hungarian businessmen have voiced their criticism of economic governance.
The future
The future of the Hungarian economy depends on fundamental reforms. Restoring the rule of law and fighting corruption are essential to regain access to EU funds. Meeting the conditions for euro adoption can provide a stable anchor for a new economic policy aimed at sustaining growth and improving competitiveness. Without the promotion of free competition and the development of high-value-added sectors, the Hungarian economy could remain trapped in middle-income countries.
Homes in Hungary sold for an average HUF 45.2m in 2024, up 13pc from a year earlier, data compiled by listed real estate broker Duna House show.
The average home price in the capital climbed 6pc to HUF 60.4m. In the rest of the country, prices rose by HUF 5m to HUF 39.1m. The price of new homes averaged HUF 830,000/sqm countrywide, but reached HUF 1.5m/sqm in Budapest.
Nationwide, flats in multi-unit dwellings sold for an average of HUF 807,000/sqm and detached houses for HUF 422,000/sqm. Between 120,000-125,000 homes were sold in Hungary in 2024.
They added that, based on the entire domestic real estate market, newly built properties changed hands at an average price of 830 thousand forints, while in the capital city, they were around 1.5 million forints per square meter.
The statement quoted Ferenc Máté, Deputy CEO of Duna House, who said the average amount of HUF 45.2 million spent by buyers on property purchases this year was 13 percent higher than the average for 2023, while the average value of property in rural areas rose by HUF 5 million to HUF 39.1 million, while in the capital the amount increased by 6 percent to HUF 60.4 million compared to last year.
The expert also pointed out that the renewed CSOK Plus has boosted the propensity of families planning to have children to buy a home while falling government bond yields have re-directed investor interest towards the property market in 2024. As a result, buyer demand has reached a two-year high, and the year could close with 120-125 thousand closed sales. Duna House transaction data also reported on the extremes in 2024: the top seller in terms of final purchase price was an energy-efficient, modern, new-build luxury villa on the Buda side of the capital for which the new owner paid more than HUF 1 billion.
In the countryside, the two highest purchase prices of HUF 430-440 million were for sale in Győr and Szentendre. At the other end of the scale was a 35-square-meter property sold for HUF 1.2 million in Tolna County.
Among second-hand properties, the record price per square meter was an 80-square-meter apartment in District XI in very good condition, which sold for over 2.6 million HUF per unit, but some people were also willing to pay 2.3 million HUF per square meter for a 36-square-meter house in Balatonlelle, which was in a habitable condition.
The smallest property sold this year was a 7-square-metre apartment in District XX, which sold for 10.8 million HUF, while the most significant property was an 867-square-metre house built in the first half of the 18th century on Szentendrei Island. In addition, a castle built in 1711 in Zala County was also among the transactions.
It was reported that buyers across the country had signed contracts for factory apartments at prices between 128,000 and 1,2 million HUF per square metre. The highest price of 1.2 million forints per square meter was for a 27-square-meter property in good condition in a residential area in Óbuda, but a 59-square-meter apartment in Komló, which was to be renovated, was also available for 128,000 forints per square meter.
As we wrote earlier, the Hungarian government has unveiled bold new measures to address Budapest’s housing crisis, including a two-year moratorium on new Airbnb rentals and registrations. Details are here.
Hungary has lowered the cap on the number of guest work permits issued to non-European Union nationals to 35,000 for 2025 in a decree issued by by the national economy minister.
Guest worker cap in Hungary
The new cap was set prioritising the protection of Hungarian families, employees, and the labour market, the National Economy Ministry said in a statement.
The ministry noted that the cap was less than half of the regulatory maximum: the average number of unfilled workplaces in the previous four quarters, or 71,000, according to data from the Central Statistics Office (KSH).
There is no doubt how many inactive reserves there are in Hungary and how to attract them into the labour market.
As we have already reported, in a village in Somogy County, Filipino guest workers are milking cows.
The phenomenon is not unique and points to a deeper problem: in many cases, no reliable Hungarian workers who could be hired for a particular job were found either locally or from the surrounding area. In contrast, behind the tightening is the government’s consistent policy of filling vacancies by activating the Hungarian labour reserve and attracting jobseekers and inactive people.
Viktor Orbán said in a Facebook post on the subject. Therefore, we will not let migrants in, and only as many guest workers as we need.”
Mr Orbán also noted that the Qatari model had been copied and modified, but that the essence of the regulation came from there. The Hungarian PM pointed out that all countries have been given a transitional period to create legislation on readmission, and our country will not accept those who fail to do so. Accordingly, ten countries were immediately removed the list, so that no guest workers can come from them. The government has not named the 10 countries, but we will inform our readers as soon as it becomes available to the public.
As we reported earlier, the amendment, published in the Hungarian Gazette on the night of 23 December, states that third-country nationals may be employed in Hungary if Hungary or the European Union has a readmission agreement with that country.
Two countries are mentioned in the Annex as exceptions, Georgia and Armenia. The Regulation does not apply to the renewal of permits issued until 31 December 2024. Neither will it apply to pending cases that have already commenced.
Orbán told a press conference that there is a quota, 65,000 last year and only 35,000 this year, under which guest workers can arrive. The government believes there are still 300-500,000 people who can be brought into the labour market in Hungary. The final decision on how to do this will be taken in January-February.
Emigation, low-wage policy
Another issue is that the Orbán government, which has been in power for 14 years, has failed to stop the emigration of Hungarian workers abroad. There are still hundreds of thousands of valuable workers in Western Europe because Hungarian wages cannot compete with those in Germany or Austria, for instance.
However, the Hungarian government does not intend to change its low-wage policy, because this is how they can attract foreign investors, who receive huge subsidies if they come here, and can operate here at a discount, with low wages and a high-quality workforce.
There is also the serious question of where the labour of the foreign factories attracted here will be filled, because labour shortages are already being experienced in many sectors, and this will exacerbate the problem by the opening of more factories.
2025 will be a particularly important year for wages in the Hungarian economy. Wage increases, including a rise in the minimum wage, are expected to be broad-based across both the corporate and public sectors, with the aim of restoring the purchasing power of wages, particularly after the impact of inflation following the energy crisis in 2022.
In addition to wage increases, another positive development is that inflation could slow and even fall below 3% in the first months of the year, a level last seen in January 2021. This should help households to finally recover from the difficulties of recent years.
Changes in minimum wage
According to Világgazdaság, a key element of wage policy is the increase in the minimum wage and the guaranteed minimum wage. From 2025, the gross minimum wage will rise to HUF 290,800 (EUR 711), while the gross guaranteed minimum wage will increase to HUF 348,800 (EUR 852), resulting in a significant rise in net earnings.
Source: depositphotos.com
This increase is part of a three-year wage agreement, by the end of which the minimum wage is expected to reach 50% of average gross earnings. By 2028, the minimum wage should reach €1,000 (HUF 409,000), and average gross earnings could approach €1 million (HUF 409 million). This will ensure stable wage growth in the long term, which could boost the economy as a whole.
After better-than-expected earnings growth last year, a slightly slower rate of wage growth—8–9%—is anticipated for next year. This aligns with increases in the minimum wage and the guaranteed minimum wage, along with a slowing inflationary environment.
It is important to note that median earnings, which provide a more realistic picture of earnings conditions, are growing even faster than the minimum wage. This reflects significant progress, especially at the lower end of the earnings scale. The purchasing power of wages is expected to increase by 4–5% by 2025, which should provide considerable relief to households after recent price rises.
The most affected
The government is addressing one of its biggest obligations by increasing the salaries of education workers. In the second phase of the three-year programme, teachers’ salaries will rise by an average of 21.2% from 1 January 2025, bringing the average teacher’s salary to HUF 844,000 (EUR 2,064) gross. The lowest salary for trainees will rise to HUF 640,900 (EUR 1,567) gross.
Illustration: canva.com
There is significant variation in salaries, with research teachers, for instance, earning up to HUF 1.78 million (EUR 4,352). The pay rises are designed to be sustainable in the long term; the government guarantees that teachers’ salaries will reach 80% of the average graduate salary by 2031, ensuring salaries are protected from inflation.
In the 2025 budget, the government has allocated HUF 675 billion (EUR 1.65 billion) for wage increases. For example, workers in the water sector will receive a 60% pay rise in three stages by 2027, with the first step being a 30% increase in 2025. A similar comprehensive settlement is planned for judges and judicial staff, with the salary base rising by 15%, from HUF 566,660 (EUR 1,385) to HUF 651,660 (EUR 1,593), from 2025. By the end of the three-year programme, judicial staff salaries could increase by up to 100%, and judges’ incomes could reach HUF 2.25 million (EUR 5,499).
One of the most successful wage improvement programmes in recent years has been in the health sector. Doctors’ salaries have increased significantly, with junior doctors now earning a gross salary of HUF 687,000 (EUR 1,679) and the most experienced doctors earning up to HUF 2.38 million (EUR 5,818). Nurses have received a two-stage pay rise, bringing the average gross salary of healthcare workers to HUF 841,000 (EUR 2,056) by 2024. These wage increases have made the healthcare sector the fourth-highest paid in the economy.
Future opportunities
For the government, 2025 will be a pivotal year for wage increases. The priority is to restore the purchasing power of earnings while maintaining economic stability, thereby creating a noticeably improved financial environment for households.
Overall, the increase in the minimum wage, the adjustment of teachers’ salaries, and additional support for judicial workers and the health sector represent significant progress. Combined with falling inflation and a stable economic environment, these developments should provide a new boost to the financial situation of Hungarian workers in 2025.
From the 1st of January 2025, the Hungarian government will introduce significant changes to the Migrant Workers Act, resulting in stricter rules for workers from non-EU countries. The changes are designed to ensure that guest workers can return to their home countries and to limit the scope of workers’ countries of origin.
According to the amendment, it is no longer sufficient for the country of origin of the guest workers to simply promise to take them back. The government is demanding a stronger guarantee that workers will actually leave Hungary when their permits expire.
Photo: Pixabay
As Telex reported, the list of countries of origin has also been substantially revised. While the list previously included countries such as the Philippines, Vietnam, Indonesia and Mongolia, the new rules mean that only two countries, Georgia and Armenia, are now eligible to send guest workers to Hungary. This effectively invalidates the previous list and narrows the possibilities for workers to come.
Maximum framework for guest workers from 2025
According to an official statement by the Hungarian Ministry of National Economy, the number of residence permits that can be issued will also be determined from 2025. This number will be capped at 35,000 per year, including both guest workers and residence permits for employment purposes. This move is intended to keep the number of guest workers under control and to adapt it to economic needs.
Photo: depositphotos.com
Government statements and industry reactions
At his end-of-year press conference, Prime Minister Viktor Orbán made it clear that the changes were not unexpected. He stressed that countries that have not undertaken to take back guest workers cannot expect Hungary to accept their workers from the 1st of January 2025. “Ten countries immediately fell off the list, maybe more,” Orbán stated, adding that the countries concerned had been informed in advance. The Prime Minister said that the tightening was in the country’s interest and there was no question of introducing it.
However, the government’s decision was not preceded by a broad consultation of businesses directly involved in the employment of guest workers. News of the tightening therefore came as a surprise to the business community. There had already been talk of the Hungarian government imposing an almost total ban on the employment of non-EU workers in Hungary, but there had been no meaningful consultation on the impact this might have on the economy and the businesses involved.
The importance of these changes
There are several reasons behind stricter regulation. On the one hand, the government is concerned with the protection and stability of the country’s labour market, and on the other hand, it is also focusing on social inclusion issues. Countries that do not ensure the readmission of guest workers will not be allowed to send workers to Hungary in the future, which clearly reflects a tightening of migration policy.
The new guest worker law introduces sweeping changes that severely restrict the countries of origin of workers, cap the number of permits that can be issued and ensure the return of workers to their home countries. While the decision is driven by strategic objectives, the changes may pose unexpected and significant challenges for operators and companies. How the government manages the feedback from economic operators and the labour market will be important in the coming period.
Hungary had a EUR 1.039bn trade surplus in October, a second reading of data released by the Central Statistics Office (KSH) on Monday shows.
Latest trade surplus data
Exports fell 0.5pc year-on-year to EUR 12.927bn. Imports edged down 0.1pc to EUR 11.888bn, KSH said. Trade with other European Union member states accounted for 76pc of Hungary’s exports and 71pc of its monthly imports.
For the period January-October, Hungary had a trade surplus of EUR 10.368bn. Exports fell 3.9pc to EUR 121.341bn and imports declined 6.3pc to EUR 110.973bn. Hungary’s terms of trade improved 0.7pc during the period as the forint weakened 2.7pc against the euro and 2.1pc to the dollar.
In October 2024 compared to a year earlier:
The value of export decreased by 0.5% and that of import by 0.1% in EUR terms.
According to calendar-adjusted data, the volume of export lessened by 4.0%, that of import decreased by 1.8%.
The balance of the external trade in goods deteriorated by EUR 53 million. (The balance showed a EUR 74 million higher surplus than the one published in the first estimate.)
The HUF price level of the external trade in goods increased by 4.0% in exports and by 2.7% in imports, compared to the same month of the previous year. The terms of trade improved by 1.3%. The HUF exchange rate depreciated by 4.2% against the EUR and by 0.9% against the US dollar.
The export volume of machinery and transport equipment decreased by 3.4%, its import volume did not change. The volume of the commodity group of electrical machinery, apparatus and appliances, n.e.s. decreased nearly by one-fifth in exports, decreasing by one-tenth in imports, too, compared to the same period of last year. The export volume of the commodity group of road vehicles slightly declined, its import volume increased in an equal degree, compared to the base period. The export volume of the commodity group telecommunication and sound recording and reproducing apparatus slightly decreased, its import volume, however, improved by almost one-fourth. The volume of the power generating machinery and equipment commodity group decreased somewhat on the export side, and was around one-fifth lower on the import one, year-on-year. The aggregate commodity group of machinery and transport equipment increased the volume decline in total turnover by 2.0 percentage points on the export side while it did not have an impact on the import turnover.
The export volume of manufactured goods increased by 4.1%, their import volume by 0.5%. The increase in export volume was due to the significant volume increase in medicinal and pharmaceutical products. The growth in the volume of imports can also be attributed to the group of medicinal and pharmaceutical products. The aggregate commodity group of manufactured goods offset the volume decline in total turnover by 1.2 percentage points in exports and increased the growth in import volume by 0.2 percentage points.
The export volume of fuels and electric energy increased by 2.7%, their import volume was 3.8% higher than one year earlier. The growth on both the export and import side is owing to the increase in the volume of petroleum, petroleum products and related materials.The change in the turnover of fuels and electric energy slowed the volume decline in total turnover by 0.1 percentage point in exports and hastened the general increase in import volume by 0.3.
The export volume of food, beverages and tobacco became 6.3% higher, their import volume increased by 8.3%. The growth in export was largely influenced by the change in the turnover of miscellaneous edible products and preparations, the increase in import was influenced by the turnover change of cereals and cereal preparations. The volume change realised by the aggregate commodity group offset the total export decrease by 0.5 percentage points, and strengthened the import growth by 0.5 percentage points.
The volume of exports to the EU-27 Member States lessened by 3.1%, and the import from there increased by 3.6%. The balance of the external trade in goods declined by EUR 441 million, generating a surplus of EUR 1304 million. This group of countries accounted for 76% of exports and 71% of imports.
In the extra-EU-27 trade, the volume of export increased by 9.3%, that of import lessened by 3.6%. The external trade balance in goods with these countries improved by EUR 388 million, showing a deficit of EUR 265 million.
After this year’s reversal of trends, a strengthening real estate market in terms of transaction numbers and prices, an ever-widening customer base, and a further 10pc expansion of the credit market are expected next year, listed real estate broker Duna House said in its forecast for 2025 on Friday.
The company said government measures, like the Home Purchase Subsidy Scheme (CSOK) Plus, housing allowance from employers used for rent and loan repayments, state-subsidised credit for young Hungarian blue-collar workers, could raise demand and from the investor side capital from government bond payments could add 20,000 transactions.
Duna House expects supply will not be able to keep up with buyer interest, so it is possible that prices will start to increase to a greater or lesser extent depending on the property type, condition and location. Annual price increase could be around 10-20pc in 2025.
Photo: depositphotos.com
The company said annual home sales this year could be around the middle of the 110,000-130,000 band, which is an approximately 14pc increase compared to 2023 and a two-year high.
Central bank issues instructions to boost competition on home insurance market
The National Bank of Hungary (NBH) has issued four executive circulars in connection with the annual home insurance campaign due in March instructing insurers and insurance brokers on best practices to boost competition on the home insurance market, the central bank said on Friday.
The NBH instructed insurers on displaying data to help consumers compare offers and switch insurers.
It also made the conditions for announcing consumer-friendly home insurance premiums more flexible to make these policies more competitive with conventional ones.
The NBH also made it clear in the customer information document that contracts cancelled during the campaign uniformly terminate on April 30 (until which date the premiums must be paid). In order to protect their property, the customers concerned must have a new insurance policy from May 1.
Another circular concerns the term discounts offered by several insurers (the principle that those who contract for a longer period pay a lower premium). Due to rapidly changing customer needs, the NBH considers a maximum three-year discount to be good practice.
In the circular addressed to insurance brokers, the NBH said it expected insurance brokers to review the policies of customers with active home insurance contracts every two years. Insurance brokers must inform customers on whether their insurance policies cover the value of the insured assets. They must also inform customers on the option of consumer-friendly home insurance.
The NBH also touched on condominiums, calling on insurance brokers to develop online calculators to help condominiums with a maximum of six apartments choose between offers. For larger condominiums, the NBH urged insurance brokers to contact their representatives in January or February in order to review the condominiums’ property insurance.
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Hungarian oil and gas company MOL on Thursday said it agreed with German-owned Optimum Vogt to acquire 100pc of Naperőmű Farm, which oversees construction of a 66 MWp photovoltaic plant in Ballószög (C Hungary).
Trial runs of the plant are expected to start in January 2025. The transaction more than doubles MOL’s renewable energy generation capacity, MOLsaid.
The electricity generated by the plant will be sold through listed alternative energy company Alteo. The facility will generate electricity equivalent to the consumption of 20,000 average Hungarian detached family homes.
Photo: MTI
The MOL group has 6 solar parks in Hungary, with combined capacity of 31.5 MW, and it also has photovoltaic capacity of 13.6 MW in Croatia. In line with its strategy, MOLaims to increase its renewable energy generation capacity to 200 MW by 2026 at group level through further solar park investments in both countries. As part of this, MOL Petrolkémia recently announced plans to build a 48 MW solar park in Tiszaújváros, scheduled to be completed in the second quarter of 2026.
The average gross wage in Hungary rose 12.9pc year-on-year to HUF 637,200 in October, data released by the Central Statistics Office (KSH) on Friday show.
Net wages climbed at the same pace to HUF 423,800. Real wages rose 9.4pc, calculating with October CPI of 3.2pc. The gross median wage increased 15.9pc to HUF 529,000. Hungary’s statutory monthly minimum wage was raised by 15pc to HUF 266,800 for unskilled labourers and by 10pc to HUF 326,000 for skilled workers from December 1, 2023.
Excluding Hungarians working full time in fostered work programmes — who earned on average gross HUF 131,600 in October — the average gross monthly wage was HUF 647,400.
Source: depositphotos.com
The average gross wage in the business sector, which includes state-owned companies, rose 12.0pc to HUF 642,100. The average gross wage in the public sector climbed 15.8pc to HUF 616,900. In the non-profit sector, the average gross wage increased 14.7pc to HUF 646,700.
For the period January-October, gross wages averaged HUF 633,900 and net wages came to HUF 421,500, both up 13.6pc from the same period a year earlier.
As a result of favourable wage dynamics and persistently low inflation, real wages have been increasing continuously and significantly for 14 months, Sándor Czomba, the state secretary for employment policy, said in a statement.
Thanks to the government’s measures, the purchasing power of family’s incomes is steadily increasing, which boosts consumption, and contributes to the Hungarian economy achieving growth above 3pc in 2025.
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Prime Minister Viktor Orbán said on Thursday that there was no consensus within the European Union regarding the war in Ukraine, so everything had to be done in connection with the war within the framework of bilateral diplomacy and not on behalf of the Hungarian EU presidency.
Ceasefire at Orthodox Christmas?
Orbántold a joint press conference with President of the European Council Antonio Costa and President of the European Commission Ursula von der Leyen after the EU summit in Brussels that the Ukraine war was the most important political issue but he had essentially no room for maneuvering on the matter because there was no consensus in the EU and it was therefore not possible to act on behalf of the European Council.
“So everything that could be done in the issue of the war had to be done independently from the presidency, not under the presidency’s framework. Actually under the arrangements of bilateral diplomacy,” Orbán said.
Orbán said much had been done, for instance a proposal for a Christmas ceasefire which had been presented outside the framework of the presidency.
In response to a question, he said he was aware that everyone wanted lasting peace and was thinking along the line of greater geopolitical context but Hungary had its own limits such as its size and its international influence corresponded to that.
He said he could see no obstacle to preventing the death of people in the frontline during the two or three days of Orthodox Christmas and to an agreement between the sides about the exchange of 700 prisoners from each side.
Photo: FB/Orbán
He added that this might be a small achievement compared to geopolitical goals, but if a few thousand fewer people die during Christmas, and if a few hundred or thousand fathers can return home to their families, it will be a European value.
We must take back leadership from the generals
Answering another question, Orbán said that he had seen in the past three years that there was no solution to the war on the battlefield. “I have seen some combative statements, military maneuvers, new weapons, hundreds of thousands dying, hundreds of thousands getting crippled, and who knows how many widows and orphans,” he added. Orbán said it was time for diplomacy to take back leadership from the generals, otherwise the war will not end within the foreseeable future.
In response to a question about how Donald Trump would end the Russia-Ukraine war as US president “in 24 hours”, Orbán said he had no authorisation to talk about the plans of other leaders. He said he had personally met Trump in the past two weeks, had a very long discussion with Russian President Vladimir Putin, and also met the president of Turkiye. He added that “even if everyone has something on their mind” he could only speak about his own plans.
Assessing the Hungarian presidency coming to an end on December 31, Orbán expressed thanks to von der Leyen and the EC for their excellent cooperation, and said that they had been able to put aside all political disputes in order to advance important matters. He also expressed thanks to Costa and his predecessor Charles Michel, saying that they had also done much in the interest of success.
Hungary’s political presidency
Orbán said there had been unprecedented security challenges in the past six months, with wars in Ukraine, in the Middle East and Africa, with a permanent danger of escalation. Illegal migration and its consequences threaten with the disintegration of the Schengen area, and economic indicators show that the EU is losing its global competitiveness, falling increasingly behind the main economic competitors.
In the meantime, the other global players have ambitious plans, with “some wanting to stay great and some wanting to become great”. As a result, Orbán said it had been decided that Hungary would operate a political presidency and not a bureaucratic one. He added that a great amount of work had been invested in the past six months, with the entire Hungarian state apparatus working to ensure that progress was being made.
In terms of competitiveness, Orbán said the Budapest declaration deserved historic attention considering that it calls for “a revolutionary streamlining”, affordable energy, supporting SMEs, and sets deadlines for the fulfillment of each task.
Orbán said another important point of the Hungarian presidency was that ministers responsible for demographic challenges met for the first time in the EU’s history to discuss the future of Europe’s demographics.
He also said that progress had been made in enlargement policy in the Western Balkans which had been blocked for a long time, talks could be started with Albania, three intergovernmental conferences were held and the organisation of an intergovernmental conference with Serbia is within reach.
The Hungarian prime minister noted that a decision about the full membership of Bulgaria and Romania in the EU’s Schengen zone had been made under the Hungarian presidency. The issue he said had been on the agenda for the past thirteen years and Hungary had held talks over six months with countries that had opposed the integration of the two countries. As a result, the full integration of the two countries will take effect on January 1, he said.
The current Hungarian presidency was the first occasion that 27 agriculture ministers managed to reach an agreement on the Common Agricultural Policy’s future, he said.
Orbán said that “we have also managed to adopt a declaration on fighting anti-Semitism and promoting Jewish life”. The declaration establishes that there is an alarmingly high-level of anti-Semitism in the EU and the community has a shared responsibility to make every possible effort towards reducing it, he said.
Orbán said that he became increasingly convinced over the past six months that the only possible way to the success, even the survival, of the European Union was if the EU makes itself more ambitious and undertakes “great things”.
“The Hungarian presidency’s slogan to make Europe great again was not a joke,” the prime minister said, adding that this was the only way for the EU to regain its competitiveness and to survive.
Asked about transatlantic cooperation, Orbán said there was full agreement at the summit that the future and security of Europe depended heavily on whether transatlantic cooperation could be maintained.
As regards the inauguration of the new US president on January 20, Orbán’s advice to the EU was to have “strategic patience and calm”, suggesting that “they should do nothing that would make future strategic cooperation within transatlantic relations more difficult”.
In the third quarter of 2024 the pace of wage increases in Hungary, compared to the same period of last year, was the third highest in the European Union, business news site portfolio.hu said on Tuesday quoting data from Eurostat.
Eurostat data show that in Q3 2024 the hourly labour costs rose by 5.1pc in the EU, compared with the same quarter of the previous year. The costs of hourly wages and salaries increased by 5.0pc and the non-wage component increased by 5.3pc.
In Q3 the highest increases in hourly wage costs for the whole economy were recorded in Romania (+17.1pc), Croatia (+15.1pc), Hungary (+14.1pc).
The non-wage component in Hungary was up 12.8pc in the third quarter, the sixth highest number in the EU. Hourly labour costs were up 13.9pc, again the third highest rate.
