By Gergely Szakacs
BUDAPEST, May 7 (Reuters) – German investor morale in Hungary has improved after an April 12 election, in which incoming prime minister Peter Magyar ousted right-wing leader Viktor Orban after his 16 years in power, a survey showed on Thursday.
Orban’s rule has been marked by frequent conflicts with foreign investors and Brussels and Hungary’s forint and bonds have rallied on prospects of a more pro-European and market-friendly turn under Magyar, who will be sworn in on Saturday.
Germany is Hungary’s top foreign investor and the conditions in Europe’s largest economy as well as its relations with Budapest have weighed on the Hungarian economy, which only last quarter showed signs of emerging from three-year stagnation.
The survey by the German-Hungarian Chamber of Industry and Commerce, carried out after the election, showed 42% of investors expected an improved economic outlook in Hungary compared to just 7% in a poll conducted before the ballot.
“The entire country looks to the future with great optimism and positive enthusiasm,” the chamber’s chairman Robert Keszte, said. “This positive sentiment helps us overcome the challenges ahead.”
INCREASED WILLINGNESS TO INVEST IN HUNGARY
The survey also showed a quarter of 260 companies polled said the election result increased their willingness to invest in Hungary, a major shift from results a year ago showing a plunge in investment plans amid economic uncertainty.
Keszte said key priority areas for German investors, such as more investment in education, support for small businesses, stamping out corruption and adopting the euro, overlapped with the priorities laid out by Magyar.
“If his Tisza Party delivers on its election promises, then the priorities highlighted by our members will start to be addressed,” Keszte said.
He also noted some areas of disagreement, such as Magyar’s plans to curb the number of workers from outside the European Union, or his plans to favour small businesses over large companies.
Keszte also said a cut in Germany’s growth outlook, Washington hiking tariffs on European car imports and the war in the Middle East could affect Budapest’s room for manoeuvre.
“The government’s planned measures will cost large amounts of money,” he said. “What they have announced so far has mostly boosted spending. They will have to be mindful of that.”
(Reporting by Gergely Szakacs)
Comments