Companies in Hungary Brace for an Uncertain Environment

Hungarian businesses have settled into an uncertain economic environment, according to a recent business survey by the German-Hungarian Chamber of Industry and Commerce (DUIHK), with both the general economic situation and the company's own business assessments looking gloomy in the long term, the president of the chamber, András Sávos, said at a press conference in Budapest on Wednesday, presenting the Spring 2025 report.

This year, DUIHK carried out its business survey for the 31st time, which was postponed until after the German presidential elections on February 23. The March survey of 236 companies, however, does not reflect the impact of the US tariff announcements and was conducted before the first quarter Hungarian GDP data release, the President pointed out.

He added that international trade conflicts negatively affect Hungary, and if the tariff disputes with the United States are not resolved, Hungary will suffer more.

The perception of Hungarian economic policy has been on a downward trend since 2022, in the areas of predictability, legal certainty and corruption. With regard to government economic policy measures, such as margin cuts, DUIHK's position is that long-term interests should not be sacrificed for short-term goals, he said. The survey data confirm the worsening trend of previous years, he added.

Dirk Wölfer, head of communications at DUIHK and author of the study, pointed out that German companies have spent some EUR 2-3 billion a year over the past ten years on development, capacity expansion or modernization in Hungary. According to the 2022 data, German-owned companies employed more than 220,000 people.

According to the report, half of the respondents (52%) rated the current state of the national economy as poor, 44% as satisfactory and 4% as good. In 2024, the figures were 41%, 44% and 14% respectively. As for this year's outlook, only 14% of respondents expect the situation to improve, 42% to remain unchanged and 44% to worsen, compared with 26%, 44% and 30% respectively a year ago.

Consistent with previous years, business leaders were more optimistic about their own company's prospects than the economy or the sector as a whole, but this year's survey reflects a more subdued mood among companies.

The current business situation was rated as good by 28% of respondents, satisfactory by 49% and poor by 23%. As for this year's business outlook, the same number of respondents expect an improvement as a deterioration (26% and 25% respectively), with 46% expecting the situation to remain unchanged.

As Dirk Wölfer said, "the business sentiment picture suggests that firms do not expect a marked acceleration in economic growth or a major upturn in exports this year."

The uncertain economic outlook has a negative impact on investment and employment, he added.