Reversed trend? People from Slovakia come to work in Hungary
Wages of the main contenders in the Hungarian industry have increased over the last few years and now have reached a level even higher than that of Slovakia. This wage advantage of the area near the border could increase further next year, but only if the forint does not weaken any more compared to the euro.
In the past two years, many workplaces have closed either temporarily or permanently all over the world. According to Világgazdaság, many factories of the automotive industry had to suspend their production or shut down entirely in Slovakia. Csongor Juhász, the executive manager of the Prohuman temporary employment agency said that therefore, many people have lost certainty of earning wages and have opted for commuting and working in Hungary.
The executive manager added that there are several prospering companies near the borders with a long history of operations that provide competitive wages compared to Slovakia.
In some cases, these workplaces require less travel for workers than commuting in Slovakia and they provide fair work environments and have established really good bonus schemes for their workers.
Világgazdaság says that the wage level of Central and Western Transdanubia have already surpassed that of the Pozsony and Western Slovakia regions in 2018.
Next year’s minimum wage agreement was signed in Hungary
Zoltán Matheika, leading researcher of Kopint-Tárki highlighted that it is especially true if the lower rate of personal income tax is also considered.
According to Telex, the most recent data of both the Hungarian and Slovakian statistical offices show that in these areas, the Hungarian average salary have reached and sometimes even surpassed Slovakian wages.
While in Nyitra (Nitra) region, the average salary was about net 262,000 forints (€ 750), the average salary of the neighbouring Hungarian Komárom-Esztergom country was 270,000 forints (€ 770). The net average salary in Nagyszombat (Trnava) with 296,000 forints (€846) is comparable to the 303,000-forint (€ 867) net average salary of the Hungarian Győr-Moson-Sopron county.
Worrying labour shortage in Hungarian hospitality industry, will employees return?
Tamás Seres, leader of the Hays Hungary Engineering & Manufacturing team told Világgazdaság, that he thinks it is possible that specialists from neighbouring regions would come to work in Hungary due to the increase of wages and the labour mobility the EU provides.
This is especially true in Slovakian regions densely populated by Hungarians, where wages are generally lower. For this reason, many people come to earn their living in Hungary. Csongor Juhász said that this phenomenon is not only happening in Western, but also in Eastern Hungary, where people from Slovakia often go to work in the Miskolc region in Hungary.
Zoltán Matheika said that it is not a mass labour migration, but thanks to the possibly Hungarian wage increases next year, the phenomenon of people commuting to work in Hungary from Slovakia might become more and more prevalent in the future.
Featured image: illustration
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Worrying labour shortage in Hungarian hospitality industry, will employees return?
40-50 thousand people left the hospitality sector, and they do not plan to return, ever. This will affect tourism in great ways, especially regarding the prices. Data from the Central Statistical Office (KSH) shows that 193,000 people worked in hospitality in 2019. In 2020, this number dropped below 177,000.
In Hungary
The coronavirus was a huge hit to the sectors of tourism and hospitality. In a former article in June, we reported that job applicants with modest skills could get the jobs for which there had been competition 5 years before. Another surprising information was that managers and salespeople had to take up cleaning chores because of labour shortage.
In August, Daily News Hungary wrote that labour shortage remained one of the biggest problems. Chefs and waiters were in demand, guests became fewer in number, and employers tried to make up for the labour shortage by employing student workers. Meanwhile, labour became 20% more expensive, and raw materials became 10% pricier. In September, we brought some bad news. One of Budapest’s oldest Hungarian restaurants closed after nearly 140 years. Read about the unfortunate event HERE.
Labour shortage seems to be worsening by the day, and no country is an exception.
Shocking numbers – Hungarian teachers’ salaries raise concerns
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Globally
Napi.hu writes that in the United States, 892,000 people quit their jobs. The majority of them worked in hospitality. In Italy, the labour shortage in the sector was estimated to be 10%. 42% of companies that operate hotels and hospitality facilities were concerned about labour shortages in Germany. In Greece, 20% of former employees left their jobs. The vast majority of them never want to return to their former positions.
Hungarian labour shortage has its negative consequences as well.
László Kovács, the President of the Hungarian Catering Industry Association, said that 40-50 thousand people were missing from hospitality, and most of them never plan to return. There are people who went back to their former jobs, but many people found jobs in other fields. Some of them work in commerce or construction, but IT was also an attractive career option for them. Former hospitality employees, in some cases, are willing to earn less money at a more stable job.
Many applicants for hospitality jobs now have unrealistic expectations when negotiating their wages. Raw materials and wages remain the same as in the summer or will possibly become more expensive.
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Hungary jobless rate at 4.0 pc in August, 2021
Hungary’s jobless rate reached 4.0 percent in August, edging up 0.1 percentage point from the previous month and 0.2 percentage point from twelve months earlier, data released by the Central Statistical Office (KSH) on Tuesday show.
The rate covers unemployment among people between the ages of 15 and 74.
In absolute terms, there were 194,100 unemployed, up by 4,900 from the previous month, and by 8,700 more than a year earlier.
The jobless rate for the 15-64 age group also stood at 4.0 percent in August.
KSH noted that data from the National Employment Service (NFSZ) show there were 256,000 registered jobseekers at the end of August, down by 25.8 percent from twelve months earlier.
The employment rate for the 15-74 age group reached 63.6 percent in August, down by 0.4 percentage point from a month earlier. In absolute terms, there were 4,678,400 employed, 25,900 fewer than in July, but 23,900 more than twelve months earlier.
The number of economically active workers in the age group stood at 4,872,600, an activity rate of 66.3 percent.
ING Bank senior analyst Péter Virovácz noted
the jobless rate has changed little for the past four months, while the number of economically active Hungarians has stabilised under 4.9 million.
He said it appears that labour supply cannot be expanded in the current regulatory environment, squeezing the labour market as the economy “races ahead”, and adding to inflationary pressure as wages rise.
He augured a decline in unemployment to 3.8 percent by year-end and said higher wages could raise the number of economically active Hungarians.
K+H chief analyst Dávid Németh said
Hungarians rejoining the labour market are being hired right away, preventing a decline in the jobless rate.
Takarékbank head analyst András Horváth said
Hungary could see a labour market shortage in the second half of the year like the one a year and a half earlier, driving up wages and creating upside inflationary risks.
He put unemployment at 4.0 percent in 2021 and projected a decline to 3.3 percent in 2022.
Read alsoHungarian teachers flee their jobs! – Wages are outrageously low
Hungarian teachers flee their jobs! – Wages are outrageously low
The situation of teachers in Hungary continues to worsen. They are likely to strike, and many of them have straight up left their profession because of low income, not to mention that many of them can only make a living thanks to their partners.
Even though the Hungarian Ministry of Human Resources said a couple of days ago that there is no labour shortage in the educational sector, the latest data of the Hungarian Central Statistical Office implies the opposite, 444 wrote.
The problem has multiple layers, and the reality is that it will take several years to solve it at its roots. One of the main issues is that the wage of educators and teachers in Hungary is very low. The root of this problem is that their salary is set taking into account the minimum wage of the year 2014. But this adds up.
Nowadays, they lose hundreds of thousands of forints (~ €300) every month, and in the past few years, they lost approximately 3-5 million forints (€ 8,630-14,383) each year because of this.
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Some of the other reasons for the labour shortage in the sector include unpaid overtime, overworking, centralised decisions, and a complex issue that comes from all of the above: the fact that the new generation of teachers lacks in number. The combination of the mentioned issues has made the teacher’s and educator’s profession very unpopular, says Portfolio.
According to the latest findings of the Hungarian Central Statistical Office, there were a total of 6,600 unoccupied positions in the education sector all around Hungary in the second quarter of 2021.
Higher wages in Romania attract an increasing number of Hungarian workers
Compared to last year’s data of the same period, the number of unoccupied positions has increased by 38%, suggesting that the problem is escalating.
This level of labour shortage poses great risks. In some places, there are not enough teachers to properly prepare students for high school graduation from certain, optional subjects (Mathematics, Hungarian, and History are mandatory). In other places, there are no Chemistry teachers, and schools have to employ freelancers to teach the subject to children, Portfolio reports.
In many elementary schools, it is almost normal practice to pool together classes during daycare as there are not enough educators, and if a teacher gets ill or is incapable to work for any time, it puts schools into difficult situations. Despite these reports, the government says that there are fewer children per teacher than before.
Higher wages in Romania attract an increasing number of Hungarian workers
President of the Federation of Chemical, Energy and General Workers of Hungary Tamás Székely explained that more and more Hungarian workers have left the country to take up employment in Romania. Higher Romanian wages and deteriorating working conditions in the Continental plant in Makó both contribute to this trend.
The coronavirus pandemic has had considerable consequences regarding the labour market in Hungary; many people have lost their employment, and the hiring of staff was stopped or paused. The pandemic has disrupted healthcare services and medical treatments and has imposed crisis on the health market and the pharmaceutical sector. Numerous operations have been cancelled or postponed, and medication habits have changed. As we have reported, there is labour shortage in the manufacturing and catering industries, and the tourism and the automotive industry are also facing serious challenges. Teachers are also dissatisfied: their salaries are so low that many of them have a problem making ends meet. According to Magyar Hang, the Teachers’ Union has recently petitioned for a salary increase, but Minister for Families Katalin Novák told RTL that the economic situation did not allow it.
In addition to these problems, President of the Federation of Chemical, Energy and General Workers of Hungary Tamás Székely drew attention to the fact that
an increasing number of Hungarian workers in the Makó region have decided to take up employment in Romania due to the higher wages offered there.
Székely also told Népszava that there has been a deterioration in working conditions in the Continental plant in Makó, as the recently introduced new code of conduct states that workers can only initiate a conversation with the prior written permission of the employer. The company argued that the ban on conversations was introduced because several accidents occurred due to non-compliance with occupational safety, but measures like this can cause further problems in employment.
There has been an increasing struggle to find workers in this sector, especially in this region,
explained Székely.
The way the government passes legislations and amendments also has an effect on employer satisfaction; if the cabinet approves legislations without any consultation (for example, in 2018, when the Hungarian Labour Code was amended without prior consultation with trade unions), it can backfire at the company level. Experience has shown that employee satisfaction is higher in workplaces where a collective agreement is signed by the employer, ensuring good working conditions.
More guest workers to come to Hungary?
A new government decree allowing workers from non-neighbouring countries to work in Hungary temporarily is about to come into effect.
As the vaccine seems to mitigate the many disadvantageous effects of the coronavirus, businesses and factories are ready to return to the pre-pandemic life. This situation causes a labour shortage in the country, which will lead to the increase of guest workers filing for a temporary work permit.
Serious labour shortage at Lake Balaton
The number of guest workers from neighbouring countries, mainly from Ukraine and Serbia, but occasionally from the Middle East and Latin America, was already relatively high before the virus appeared. In 2016, 14500 applications to receive a residence permit were filed, while this number grew to 78000 three years later.
Based on Eurostat data,
in 2018, over 31 thousand people received a residence permit for work purposes.
As there is a lack of workforce in Hungary in general, the government decided to open the country’s gates wide and give more opportunities to these people.
Minister of Foreign Affairs and Trade Péter Szijjártó announced in July that
the government would make it possible for people coming from non-neighbouring, third-world countries, who wish to work in Hungary on a temporary basis, to do so through work agencies.
He will set up a specific group of labour force agencies for this purpose. The government decree containing the decision will be in effect starting from September 1.
Guest workers in Hungary mostly do basic physical labour in factories belonging to the electronics and automotive industries. Work that Hungarians will not do. This solution might fill in this specific gap in the labour market; however, in the long run, there would be better ways to do so partly because it is not in the best interest of recruitment agencies to send workers to another country for longer than three months since their goal is to receive more of these orders on a regular basis. On the other hand, this solution is not the best one for the whole of the Hungarian economy either.
Zoltán László, vice-president of the Vasas Alliance of Trade Unions, told Népszava that
the Hungarian economy and local businesses would be much better off with committed people they can rely on.
Those who do not prepare to leave the country within a couple of months are the ones who can create real value. Keeping these workers would be crucial. Especially as the majority of guest workers, mainly those from Ukraine and Serbia, leave Hungary after some months hoping they would get a better-paid job either in Western Europe or even in Poland.
Moreover, the language barrier can lead to further problems, from an extended learning period to accidents or bad quality work. Zoltán László believes that trade unions can have a vital role in this respect, as their local representatives know the companies’ problems and can help Hungarian and guest workers get along better. The fact that guest workers are provided with accommodation and their travelling fees are covered causes dissatisfaction among Hungarians. They feel that their work is not as appreciated, and they receive less money for the same job.
Read alsoSamsung’s factory in Hungary causes unbearable noise to locals
Number of Hungarians working in Austria to set new record this summer?!
The number of Hungarians working in Austria is slowly recovering to pre-epidemic levels, attracting dozens of skilled and unskilled workers with “dream salaries”. Presumably, the number of Hungarian employees in the neighbouring country will reach its annual peak in July-August and could even break a record this summer.
In May, 98,374 Hungarian citizens were registered with the Austrian social security – a number which is approaching the level of the last lively month in February 2020 before the first wave of the pandemic. At that time, more than 101,000 Hungarians were registered in the Austrian hospitality industry.
Based on forecasts, the Hungarian employment record may break even during the summer,
as the sector still needs a lot of people for the tourist season. Presumably, the number of Hungarians working in Austria will reach its annual peak during July-August.
As for the advertised positions, both skilled and unskilled workers are expected, and in many cases, a minimum knowledge of the language is sufficient.
Without a vocational qualification, you can expect a gross hourly wage of EUR 10; however, in the case of a highly demanded profession, the salary is even higher than that,
depending on the region of the country. It is good to know that in the area close to the Hungarian border, the benefits are much lower than in the other end of the country, in Tyrol or Innsbruck.
The Hungarian news portal Pénzcentrum has collected the latest, highest-paying job offers in Austria, which are the following:
- Factory worker in the food industry: gross €10.64/hour + free accommodation + 13th and 14th month’s salary (approx. €1,600)
- A Hungarian waiter in Tyrol can earn €1,800 net with free accommodation and meals, 13th and 14th month’s salary.
- Heating technicians in Linz: net €2,400 in exchange for working 167 hours a month; accommodation is free. Basic German knowledge required.
- In Tyrol, cleaning buildings can get you a net of €1,300-1,400 per month.
- Locksmith specialists with welding skills are sought in St. Stefan (242 km from Sopron): 5 years of professional experience with a net salary of €2,100-2,500.
- Electrical installation work in Pinkafeld (100 km from Sopron): €2,400-2,500 net.
- Barbecue chef: €2,000 per month in Tyrol, meals and accommodation are free.
- Parcel supplier: €1,900 per month.
- In Kaprun, Hungarian waiters are offered €1,800 net per month. A minimum of 3 years of experience and intermediate German language skills are required.
In Hungary, the labour shortage caused by the uncertainty in the tourism sector can be mostly observed in the capital where hotel operators are working to resolve the situation with wage increases and redeployments. According to Portfolio, despite the significant wage increase in recent months in the sector, there is still a huge labour shortage in the Hungarian hospitality industry.
For the time being, it is not yet known how long the current situation will last as, after a long period of decline, the number of new coronavirus infections has started to increase again in Austria and many other EU countries. Due to the spread of the highly contagious Delta variant, the fourth wave of the pandemic has started in Austria, as a result of which the local committees are proposing to reintroduce different measures depending on the number of cases and the burden on the health system. Currently, the Austrian government continues to adhere to the opening schedule, the next step in which will be realised on 22nd July when further ease of mask-wearing rules can be expected.
Labour shortage to defeat Hungarian tourism sector? Managers have to clean the hotels
The catering and hospitality industries are severely affected by the lack of a workforce. Chefs, waiters, bartenders are missing from restaurants, as they are afraid of further dismissals and the fourth wave of the pandemic. Most of those who left catering are now working in construction, transportation, and retail – industries that were thriving even during the pandemic. The majority of former catering employees are not planning to return.
Szabolcs Tóth, the general manager of Attaboy Burger Bistro, told G7 that they got applications for their job openings until April, but even before, in general, only 3 people out of 10 went to the job interview and a similar percentage showed up on the trial day. Delivery jobs fill up more easily.
Bori Sinkó, the owner of Hokedli, said that a few months ago, it had been easier to find new employees. She added that, often, specially trained professionals applied, such as a chef who had previously worked in a fine-dining restaurant.
Szabolcs Tóth said that job applicants with modest skills can now get the jobs for which there had been competition 5 years ago.
Many catering businesses have raised their employees’ salaries, and the prices match this increase. Some restaurant owners explain this by the closeness of Austria. Employees want Western European pay, but to be able to grant their wish, employers have to raise the prices. As a result, it is predicted that some restaurants will raise salaries and prices while others will probably close down.
The hospitality industry is going through similar struggles. Tamás Flesch, the president of the Hungarian Association of Hotels and Restaurants, said that accommodation services in Budapest are trying their best to minimise the losses, writes 24.hu.
According to Flesch, there are very few employees who stayed in the industry, and many times, managers and salespeople take up cleaning chores. There is a lack of chefs as well.
75-80% of domestic tourism is based on visitors from Budapest. Even if 8-10% of the rural occupancy in Budapest could be doubled, it would not help hotels in Budapest stay afloat. Foreigners are a significant factor in Budapest tourism.
How is it possible that almost 1 million people do not work in Hungary?
In Hungary, almost a tenth of the population is economically inactive, which means that 900,000 Hungarians are outside of the labour market. This proportion is quite significant compared to the EU average, but what is the reason behind it, and which gender is most affected?
According to the latest Eurostat report, the percentage of the total working-age population (aged 15-64) shows a declining trend in the labour market of the European Union. During the last decade, the proportion of economically active people has declined by almost 6% in the EU; however, a slight increase could be observed last year when it increased by 0.5 percentage points, resulting in 27.1% in 2020.
As the Hungarian news portal Pénzcentrum reports,
the statistics consider all people of working age who are neither employed nor unemployed to be outside the labour market.
This includes all the people who are not available in the world of work for various reasons, including studying, caring for a family member, a retired status, or being unable to work due to an illness or disability.
Based on last year’s data, Eurostat has made a ranking of the countries considering the proportion of economically inactive people, according to which Italy had the largest number of people outside the world of work. Numerically, this means 35.9% of the population. The Mediterranean country was followed by Croatia in the second and Greece in the third place where the proportion of economically inactive people is 32.9% and 32.6% respectively. The non-labour market share was also high in Belgium and Romania, exceeding 30%.
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Hungary is in the midfield of the ranking, meaning that 27.2% of the working-age group did not work in 2020.
This is approximately 900,000 people of the total population of 15-64-year-olds.
The good news is that the declining trend of economic inactivity in the EU can also be observed in Hungary, where this proportion has decreased by almost 11% in the last decade. Despite the promising tendency, Hungary is still above the EU average in terms of economic inactivity.
In terms of gender ratio, the proportion of women outside the labour market is more significant than that of men,
a trend which can be observed since the beginning of the Eurostat time series. However, the gender gap has narrowed during the last two decades. Accordingly, the indicator has reached its lowest point last year. Still, the difference is remarkable in Hungary.
In 2020, 19.7% of men of working age were economically inactive, while 34.7% of women were outside the labour market.
So, the difference is a total of 15 percentage points, which is much higher than the EU average.
According to the Eurostat ranking, the best situation can be observed in Sweden, where only 17.5% of the population are economically inactive. The Netherlands can also be proud of its positive results, as only 19.1% of the population is outside of the labour market.
Read alsoThousands of healthcare workers plan to resign in Hungary – Fresh survey results
The re-ignition of economies might turn into a struggle for guest labour
According to some statistics, in the past five to six years, the number of guest workers working in Hungary have significantly grown, In some sectors, guest workers were the only viable option instead of shutting down. Unfortunately, due to the coronavirus pandemic that struck the world unprepared, many guest workers were stuck in their own countries unable to work. But as countries are reopening and the economy is starting to swing back up, a huge competition for workforce is expected.
There is the general belief among working people that guest workers take the job from Hungarians, but that is simply not true. It is quite the opposite. There have been entire sectors where the labour shortage was such a serious issue, that its operation was endangered, says Piacesprofit. There is nothing wrong with guest labour, but it should be adequately controlled and entirely transparent.
Csongor Juhász, the executive director of Prohuman, Hungary’s largest HR provider said that the current upsurge of labour is just the surface. He says that many people who have changed professions from services and the catering industry will, with the reopening of the country, go back to their original professions and in turn that will cause another labour shortage in some sectors.
There are already not enough workforce in sectors like the food industry, processing industry and in some commercial areas.
The above-mentioned re-distribution of the workforce will effect these sectors more severely and according to the professionals at Prohuman, that will cause a huge competition between Hungary and the surrounding countries looking for guest labour. In the Czech Republic, about 15% of the labour force are guest workers.
Csongor Juhász said to Piacesprofit, that Hungary is behind other countries in the labour competition.
It has to compete for non-EU guest labour with countries such as Austria, the Czech Republic, Germany, Poland, Croatia and Slovakia. The executive director added that Hungary is in a disadvantageous position due to several factors;
naturally, Western European countries have a better chance of obtaining guest labour due to the higher wages, but other Central and Eastern European countries also have an upper hand. Most guest workers can communicate in those countries in their mother tongues much more easily. The language is a huge barrier for guest workers coming to Hungary.
Another limiting factor is the travel. The authorities in charge have to balance between the proper monitoring of guest workers, in particular to the still ongoing coronavirus pandemic, but must also satisfy the labour need of affected sectors.
The monitoring should not bottleneck the flow of labour, but it must also ensure that there is as few cases of illegal workers as possible, all this while complying to the measures of the coronavirus pandemic.
If the flow of labour stops for a substantial amount of time, then companies might close their businesses and move to another country.
If this would happen to the car industry and processing industry – which are both major contributors to Hungarian economy –, then Hungary might face severe consequences.
Read alsoMinister: Jobs, family, innovation are Hungary’s solutions to social challenges
Statistics: Hungary gross wages jump to EUR 1,144
Gross wages in Hungary grew by an annual 9.8 percent in February, the Central Statistical Office (KSH) said on Thursday.
Gross wages averaged 414,400 forints (EUR 1,144) and 275,600 after tax.
The average gross wage in the business sector, which includes state-owned companies, rose by 8.8 percent to 426,200 forints, excluding fostered workers.
The average gross wage in the public sector, excluding fostered workers, increased by 13.3 percent to 431,600 forints.
A broader set of data covering all full-time employees, not only the ones at employers with a payroll of five or more, show the average gross wage stood at 401,900 forints and the average net wage at 267,300 forints in February.
Calculating with twelve-month consumer price inflation of 3.1 percent, wages rose by an annual 6.5 percent, KSH said.
Senior analyst of Takarékbank András Horváth said wage growth in February was above expectations, despite the pandemic and a small minimum wage increase. Employers are forced to continue raising wages in order to retain and attract workers and as a result of the inflationary environment, he added.
ING Bank senior analyst Péter Virovácz said the February wage statistics had been a positive surprise but added that the relatively high increase was partly due to technical factors.
Full-time employment increased in the business sector in February and it reflected workforce demands in sectors characterised by higher-than-average wages, he said.
Virovácz added that wage dynamics were expected to gradually slow down in the rest of the year and put full-year wage growth at around 7 percent.
K and H senior analyst Dávid Németh said the growth in wages for doctors, judges, prosecutors and kindergarten workers greatly contributed to the wage statistics. He projected a real wage growth rate of around 5 percent for the whole of 2021.
Read alsoStatistics: Hungary gross wages jump to EUR 1,144
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IMF upgrades global growth outlook, Hungary gets good forecast
The International Monetary Fund raised its outlook for global economic growth again on Tuesday, forecasting worldwide output would rise 6% this year, a rate unseen since the 1970s, thanks largely to the unprecedented policy responses to the COVID-19 pandemic.
That upgrade, from 5.5% less than three months ago, largely reflects a rapidly brightening outlook for the U.S. economy, which the IMF now sees growing by 6.4% in 2021, the fastest since the early 1980s. That’s up 1.3 percentage points from the IMF’s 5.1% projection in late January and nearly double the rate it estimated in October.
The IMF forecast, if realized, would mark the fastest pace of global growth since 1976 but also comes off the steepest annual downturn of the post-war era last year as the pandemic brought commerce around the world to a near stand-still at times. The fund said the world economy contracted 3.3% in 2020, a modest upgrade from an estimated contraction of 3.5% in its January update.
The latest World Economic Outlook – released at the start of the IMF’s and World Bank’s spring meetings – reflects a dramatic divergence between the outlook for the United States and much of the rest of the world courtesy of another $1.9 trillion in pandemic relief spending recently enacted in Washington.
The outlooks for other advanced economy heavyweights, such as Germany, France and Japan, hardly improved at all since January.
Nonetheless, with the heft of the U.S. outlook improvement as the main driver, the IMF marked up its advanced economy growth estimate to 5.1% from 4.3%.
Forecasts for emerging market economies, while somewhat improved, took a back seat to their developed peers. The fund’s outlook for EM economies rose by just 0.4 percentage point – half of the advanced economy mark-up – to 6.7% from the view in January.
“(M)ultispeed recoveries are under way in all regions and across income groups, linked to stark differences in the pace of vaccine rollout, the extent of economic policy support, and structural factors such as reliance on tourism,” the IMF said in its report summary.
The United States economy this year will join China in regaining a level of gross domestic product that exceeds where it stood before the pandemic struck just over a year ago, the IMF said. China recaptured all of its lost growth by the end of 2020.
The IMF emphasized the high degree of uncertainty surrounding the outlook, and that improvements could easily be tripped up by any of several factors, with success against the pandemic topping the list.
“Greater progress with vaccinations can uplift the forecast, while new virus variants that evade vaccines can lead to a sharp downgrade,” it said.
Another big risk centers around the persistence of accommodative policies, from the United States in particular. Long-term interest rates around the world have risen sharply since January, as market participants revise their expectations for how soon the U.S. Federal Reserve begins to normalize its policy stance.
IMF raises GDP growth forecast for Hungary
The IMF raised its projection for Hungary’s GDP growth this year to 4.3 percent.
The projection was raised from 3.9 percent in the previous forecast released last October.
Hungary’s economy contracted by 5 percent in 2020.
The IMF sees Hungary’s GDP growth rising to 5.9 percent in 2022.
The IMF projects average annual inflation will pick up to 3.6 percent this year before decelerating to 3.5 percent in 2022. The projection is up from 3.4 percent forecast in October.
It sees the unemployment rate dropping to 3.8 percent in 2021 and to 3.5 percent in 2022.
The current account deficit is set to widen from 0.2 percent to 0.4 percent of GDP this year before narrowing to 0.3 percent in 2022.
Hungary’s local council-run outpatient clinics to be managed by the local hospitals
Hungary’s local council-run outpatient clinics will be managed by the local hospitals until the expiration of the special legal order in connection with measures aimed at protecting the country against the coronavirus pandemic, the government’s coronavirus press centre said on Tuesday.
The move is aimed at improving patient care, easing the burden on health-care workers and ensuring the implementation of Hungary’s Covid-19 vaccination strategy, the centre told MTI.
It will also ensure that the health-care system operates under a single leadership, thereby improving the effectiveness of protective measures against the virus, it added.
The centre also emphasised the importance of having outpatient clinics participate in the health-care sector’s pandemic defence efforts and take part in the country’s mass vaccination drive.
The government will therefore issue a decree authorising hospitals to oversee the operations of outpatient clinics in their areas for the duration of the special legal order, the centre said.
The decree will also expand the authority of county hospitals, university clinics and the capital’s central hospitals to oversee all activities related to health care in their respective areas.
The decree will soon be published in the official gazette Magyar Közlöny, the centre added.
Read alsoBREAKING – Hungary records highest ever daily COVID death toll
Overwhelmed COVID hospitals in Hungary: Civilians are being recruited
Volunteers would take 3-4-hour-long training before assisting medical staff in hospitals.
The third wave of the coronavirus is sweeping through Hungary, causing immense problems for doctors and nurses who are getting more and more exhausted due to the high number of patients in need of medical attention. The lack of personnel for this amount of infected patients is further complicating the situation.
Hvg.hu reports that the Regional Organisation of Győr-Moson-Sopron County that belongs to the Hungarian Medical Chamber announced on Sunday afternoon on their Facebook page that they are
looking for volunteers without any medical background to help to care for coronavirus patients in intensive care units.
“There is a huge overload in every coronavirus intensive care unit in almost every hospital. There are few nurses; moreover, they are all exhausted. This will further intensify in the upcoming weeks. We do not know how long it will last or how many more waves will come.
Motivated, trustworthy, and disciplined non-professionals trained for specific tasks would mean an immense help when caring for patients in Covid-19 units,”
they said.
The organisation created a training program boosted with a practical part that has already been tested. They say that a 3 or 4 hour-long training is sufficient to acquire the basic knowledge needed for these tasks. However, they emphasise that this training does not give a professional qualification, nor does it replace qualified nurses. Furthermore, the Chamber adds that they cannot guarantee for everyone who goes through with the training to be employed by a hospital.
The post also sets out the criteria to apply: physically and mentally strong, morally unquestionable, possibly young people but of age, who are willing to work under harsh circumstances in protective equipment.
They are looking for people who have either been vaccinated or can prove that they have gone through the infection in the past 6 months. If neither of these two conditions applies, applicants need to be under 45 years of age, aware of the dangers of infection, and having finished at least primary school.
Training will be carried out in Győr, Mosonmagyaróvár, and Sopron.
The clinic of Semmelweis University is also looking for volunteers on their website.
“If you are a medical student, a paramedic student, or have a medical qualification but work in another field, you can definitely help us. If you do not have the qualification, if you do not study in a medical field, but you would like to help, we welcome you.”
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Survival is the current goal, but what is the catering and hotel industry’s future?
Catering and hotel industry are obviously the one most severely hit by the pandemic-caused crisis and lock-downs. According to the Hungarian Hotel and Restaurant Association’s trend report, the number of guest nights fell by almost 40% nationwide in 2020 compared to the previous year, while in November the decline was even more dramatic: almost 90% compared to 2019. Plenty of people are forced to leave their careers to seek livelihood in other areas, and the big question is whether they will return later. At the same time, the industry is already preparing to re-opening and restart. How will this all be carried out? WHC Group looked for the answer to this question with the help of top experts at the March event of HR Fest conference series.
Catering and hotel industry has been suffering from one of the deepest, protracted crises of decades for exactly one year now. This is also a challenge for national economy, as the sector counts as a driving force: tourism-related activities meant employment for nearly half a million people before the outbreak of the coronavirus, and domestic guest nights in themselves meant about a turnover of HUF 400 billion for the segments. According to estimates, the multiplier effect caused an economic loss of nearly HUF 800-900 billion due to the problems in the catering and hotel industry, and it is yet unknown how and at what pace the sector will recover after the pandemic. The picture is mixed: many are only able to catch their breath with sectoral subsidies and food delivery, whereas others are already preparing for the post-pandemic world, but uncertainty is common – will the catering and hotel industry be capable of getting back the valuable labour force leaked away?
Where does labour force wander to?
Representatives of the sector shared their experience of the past year and plans for the near future at the March event of HR Fest. According to Zsuzsanna Kiss, HR Director of Budapest Marriott Hotel:
„the sector already lacked nearly 10 000 employees in 2019, as hard-working and motivated colleagues with solid language skills were enticed by business service or call centres even before the outbreak of the pandemic – not to mention alternatives abroad. It is key for the hotel and catering industry to emerge from the crisis stronger, with new plans and better wage options, in other words, the whole HORECA sector needs to level up in order to remain competitive in the labour market in the long run.”
Realizing this, most industry players place a strong emphasis on development, creating more flexible working conditions, and prioritizing employee safety and health.
Retaining employment is another real challenge for employers, just as maintaining motivation and trust in their profession has become a key issue. Viktor Göltl, CEO of WHC Group, a company focusing on permanent placement, temporary placement, student and pensioner work, and wage accounting, thinks that uncertainty can generally be seen among employees, which makes it particularly important for management to maintain continuous, transparent communication, as well as measures to support the sense of security, such as regular COVID testing or social distancing in daily work.
Constant replanning has become part of normal business
Industry players have plenty of plans and strategies in their heads, but for the time being, actions related to re-opening and its timing are part of a fantasy rather. In general, an exceptional summer season similar to last year, and a revival of domestic tourism, at least temporarily, is expected. Positive outlook is only expected in connection with Lake Balaton and some other popular rural destinations though as in the capital city most hotels have already let go of 2021, and predict the relative return of previous demand for next spring season at the earliest, while some say getting back on their feet may take up to 2-4 years. There are hotels belonging to larger chains that have been closed for a year, while other facilities open from time to time or are constantly welcoming business travellers. According to Tamás Flesch, owner of Continental Group and president of Hungarian Hotel and Restaurant Association, such estimation cannot yet be made about the return of foreign guests, however, it is already clear that building up the proper level and quality of employment when re-opening might be the bottleneck.
A chronic shortage of labour is envisioned
Experts say whether a gradual or explosive awakening awaits the HORECA industry, the consequences of the crisis will make their effect in the long run. It can already be seen that employers are more flexible and have more trust in their colleagues, employees appreciate stability even more, while cohesion among colleagues has become stronger. This is the very fact executives in the sector have faith in: in this field, employee experience and guest experience are almost inseparable, so they hope catering and hotel staff who are committed to their profession will return after the crisis.
Despite optimistic plans however, it seems coronavirus has seriously shaked the future of the catering and hotel industry.
Among the younger generation, the industry lost part of its popularity already before last year, since we are talking about a profession that requires great dedication, perseverance, exceptional stress tolerance and, in particular cases, weekend or night work, whereas wages often do not compensate employees for these sacrifices.
Unfortunately, the pandemic has accelerated these trends, also demonstrating that in spite of the seemingly bombproof, internationally sought knowledge, an outer circumstance can destabilize employees1 livelihood at any time. The lesson is therefore given: the most important goal for the catering and hotel industry is to rebuild the confidence that has been shaken over the past year as soon as possible, and to provide employees with a secure alternative in the longer term – on which there is full consensus among industry players.
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Programming school Codecool continues European expansion
Codecool, one of the top programming schools and IT Talent Hubs in Central Europe has closed an investment round of EUR 7 million. The company, which offers a revolutionary model for training IT specialists, through its 3 to 12-month courses, plans further expansion and product development, supported by its new VC partner Integral Venture Partners and its earlier investors Lead Ventures and PortfoLion Capital Partners. The programming school will also open two new campuses in Central Europe this year.
The challenge created by the labour shortage in the IT sector will persist and further intensify in the forthcoming years. According to estimates, in 2020, there were about 825,000 vacant positions in the information and communications technology sector in the EU, based on the European Commission’s data. More than half (58%) of the businesses in the industry claimed that it was challenging for them to find IT professionals with the right skills. Labour shortage in the tech industry may jeopardise the competitiveness of businesses, and therefore, overall economic development.
On top of that, Central Europe has evolved to be one of the most attractive IT outsourcing destinations for the U.S. and Western European partners, matching traditional IT offshoring and outsourcing hubs like India or China, in key aspects such as service quality, work reliability, knowledge and innovation.
The growing demand for up-to-date, practice-oriented IT specialists in the region also contributes to this trend.
A solution to these challenges is to improve and support alternative IT training programs, besides traditional university courses. The opportunities created by the demand for new forms of education have already been recognised by investors, too. Based on an analysis by Dealroom, the value of new capital investments in EdTech increased by 94% in 2020, reaching USD 13 billion.
Targets by 2025
Codecool – founded by Hungarian businessmen in 2014 – completed its third successful investment round by its EUR 7 million agreement concluded with Integral Venture Partners, with financial advisory support by Clairfield. With the EUR 12.5 million capital raised so far in total, Codecool matches up in investments with top European actors on the IT education market (Ironhack: EUR 22m, Le Wagon: EUR 16m). At present, the programming school operates campuses located in Hungary, Romania and Poland, and over 1,000 of its graduates work in tech across Europe.
“The investment enables us to continue our European expansion. We’re planning to enter two new markets this year – we consider Austria, Serbia and Bulgaria. Our target is to operate more than ten Codecool campuses by 2025,”
says CEO of Codecool József Boda. “Expansion, however, does not only mean increasing the number of our schools. Further developing our corporate re- and upskilling courses are also in our focus. Our experience shows that executives are increasingly open to train or reskill their existing employees, as it is often time-consuming and costly to find new experts with appropriate skills on the labour market.”
At the same time, Codecool is also continuously extending the range of its open courses. In addition to its full-stack course with a job guarantee, specialised 3 to 4-month online IT courses were added to the portfolio of the school last year. In line with the demands of the labour market, further training programs are under development. In 2025 the target number of graduates from the programming school will increase to several thousand per year.
“Codecool supports a fundamental, long-term macro and labour market trend – the promotion of digitalisation and the increasing significance of programming skills – through a unique and flexible business model. This model puts equal emphasis on the training of high-quality coders, and the fast and effective satisfaction of corporate demand for human resources. These, together with the regional coverage and the expansion plans make this company especially attractive for Integral Group and its investors, as education is one of our key focus fields”
-concluded Investment Executive of Integral Venture Partners, Ádám Szalai.
“In offering 12-month long intensive and practice-oriented programming courses, Codecool has currently no competitor in the Hungarian market. The method is proven: 98% of the more than 1,000 Codecool graduates have already landed an IT job”
highlights Ábel Galácz, CEO of Lead Ventures, funded by MOL and MFB invest (which are also founders of Enter Tomorrow venture capital fund). According to the investor, Codecool’s market outlooks are even brighter considering that Hungarian higher education cannot deliver the necessary number of IT professionals, even with an increased capacity.
“As the very first institutional investors of Codecool, we have known the team for years now, and our trust in them has always been very strong. They were able to react quickly and effectively during the pandemic, which is the essential characteristic of a successful scale-up. And they are a key player in EdTech (education technology), which is one of the hottest sectors today. Impacted by the recession, a lot of people feel the need, or are even actually forced in some unfortunate cases to start new careers and further develop their skills. Consequently, we strongly believe in further growth” – added Zsolt Mihály, Investment Manager of PortfoLion Capital Partners.
International contribution to the development of digital skills
In the Autumn of 2020 Codecool, together with leading large, multinational corporations like Amazon Web Services and Adecco, started the development of a new, EU-level software development skills strategy and curriculum, as founder of European Software Skills Alliance. Via the Alliance, the experience of the school in the field of training software developers will not only influence the training of IT professionals in the region, but also on the entire continent.
Last year, the achievements of Codecool were also recognised by a top IT forum: the Amsterdam-based The Next Web listed Codecool among the 20 most exciting European companies on its Tech5 list collecting the most promising scale-up companies.
Read alsoHungarian inventions we would not want to live without
Trade unions appeal against law on health staff status in Hungary
An alliance of trade unions in the health sector has appealed to the ombudsman and to international organisations over passages of the law governing the legal status of health-care personnel, which they say “seriously violate” the constitution.
The Union for Health, including organisations of doctors, medical universities, ambulance and other health-care staff, said in a statement on Tuesday that the contested stipulations stripped employees of their right to a collective agreement and severely curbed their right to strike. The alliance therefore asked the ombudsman to initiate a review of the legislation by the Constitutional Court.
“Collective bargaining is a fundamental right, which must only be restricted in an extremely justified case, in line with the basic principles of necessity and proportionality,” the statement said. It added that the law’s justification failed to indicate why the restrictions were necessary. “Nor has the government provided an explanation,” it added.
“The restrictions are absolutely unnecessary and unacceptable,” the statement said.
The law states that strikes can only be staged in agreement with the government rather than with the employer, the statement noted. Any strike called without such an agreement is considered unlawful, the statement added.
The restrictions also violate Hungary’s international agreements such as the International Labour Organisation’s accord aimed at protecting employees’ rights to free assembly and organisation and the European Social Charter under which the Hungarian government agreed to facilitate consultations between employees and employers, as well as to set up appropriate mechanisms to settle labour disputes, the document said.
Signatories of the statement added that an ILO investigation was under way.
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Statistical Office: Hungary’s unemployment rate on the rise
Hungary’s three-month rolling average jobless rate was 4.3 percent in December, edging up 0.2 of a percentage point from the previous month, the Central Statistical Office (KSH) said on Thursday.
In absolute terms, there were 200,000 unemployed, 10,000 more than in November and up 59,000 from a year earlier, KSH said.
In annual comparison, the jobless rate grew by 1.2 percentage points.
The rate covers unemployment among people between the ages of 15 and 74.
The unemployment rate increased in all regions except Southern Transdanubia: by the largest amount (1.7 percentage points) in the Northern Great Plain and the Pest region. In the Northern Great Plain, the increase in the rate also caused a high rate value (7.4%).
The unemployment rate in Northern Hungary also increased significantly, by 1.5 percentage points to 5.3%. Unemployment was lowest in Western and Central Transdanubia (1.9 and 2.3%, respectively).
The three-month rolling average number of employed stood at 4,482,300 in December, 37,300 fewer than in the same period a year earlier. The employment rate was 60.5 percent, down from 61.0 percent a year earlier.
The number of employed included 92,100 Hungarians in fostered work programmes and 94,900 working abroad. The number of those employed on the domestic primary labour market edged up 0.1 percent to 4,295,300, while the number of fostered workers dropped by 14.8 percent. The number of those working abroad fell by 20.9 percent.
As with the unemployment data, KSH also published standalone employment figures for the month of December. These show the number of employed Hungarians rose by 4,000 to 4,500,000 from November but fell by 14,000 from twelve months earlier.
The number of registered jobseekers increased by 23.8% to 291,000.
