Record amounts of foreign direct investment have been attracted, yet Hungarian businesses, spooked by tight labor markets, have generally chosen to target staff pay rises to try and keep hold of them rather than investing in their businesses.

Hungary, as economists never tire of saying, is an open economy, and therefore prone to influences beyond its control. More than anything, its economy is deeply dependent on the health, or otherwise, of Germany’s. Don’t just take my word for it. According to no less an authority than the German-Hungarian Chamber of Industry and Commerce (DUIHK), around a quarter of Hungarian exports go to Germany, whilst German companies in Hungary employ more than 230,000 people and generate more than 12% of the country’s total value added. As I said, German industry matters.

Twice a year, the DUIHK takes the pulse of its members, asking them how business is going, what is holding them back, what works well and what less so. We report the results of the latest sentiment survey in this issue. What makes them so useful is that they do not look at Hungary in isolation; they also draw on results from near-identical surveys across 15 countries in the Central and Eastern European region, enabling a regional perspective.

Go back to Russia’s full-scale invasion of Ukraine and the energy crisis that followed. Inflation was already ticking up, but the cost shock turbo-charged it. Hungary blamed its inflation on the invasion and on the subsequent EU sanctions targeting Russia. According to EU figures from 2022, inflation was high, and averaged 9.2% in the EU and 8.4% in the euro area. It peaked at 11.5% in the EU in October 2022 (and at 10.6% in the euro area). 2022 year-end inflation was highest in Hungary at 25% (it peaked at 25.7% in January 2023), and the Baltics (20.7% in Latvia, 20% in Lithuania, 17.5% in Estonia. At the same time, inflation in the Czech Republic was around 18%, and in Poland and Slovakia, it was around 16%. The Fidesz government rarely discussed comparative figures, sticking to its narrative of blaming the war and sanctions, but comparative surveys such as those by the DUIHK provided important context. They still do.

This year’s survey came just before the elections, with 264 member companies questioned from March 2 to April 2. But the chamber also did a flash survey after the election, from April 16–23, with 139 participants. Prior to the election, economic and business expectations were at the same low levels seen over the past 2-3 years and had even weakened further in some cases. Post-election, those outcomes had moved into positive territory.

The chamber is quick to point out that, while the Tisza Party’s manifesto broadly falls in line with the priorities of DUIHK members, there remain areas where “further consultation” will be needed, not least on labor market questions. And, as the authors of the report told us, post-election optimism was above average among companies that mainly serve domestic customers, while large industrial exporters drew little support from the election. In other words, Hungary’s economic problems were not solved by one election. Difficult decisions lie ahead, and significant challenges will follow. But the mood music, the vibe, is very different. We start from a better place than we might otherwise be in. Just ask the Germans.

Robin Marshall

Editor-in-chief

This editorial was first published in the Budapest Business Journal print issue of May 22, 2026.