DUIHK members optimistic about economic recovery from COVID

Analysis

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The members of the German-Hungarian Chamber of Industry and Commerce (DUIHK) and other foreign investors are expecting renewed economic activity this year, both for the economy as a whole and even more so for their own business, according to the chamber’s latest economic survey.

András Sávos, President of the DUIHK, said at the presentation of the survey that the global outbreak of the coronavirus virus in 2020 had caused an unprecedented setback for the global and Hungarian economies. 

"We are starting from a weak base, but there is hope that we can make up a significant part of last year's weakening this year," Sávos said. 

As a result, far more companies are planning to increase headcount and investment spending than are planning to cut back, according to the survey, he added. 

He also noted that it was encouraging that despite the economic crisis caused by the pandemic, the improving trend in business sentiment has continued in a number of areas, with the country's performance above the regional average in several aspects and even among the leaders on some.

Assessing the results of the study, Minister of Finance Mihály Varga welcomed the positive expectations of the Chamber's member companies, as they support the Hungarian government's growth forecast of 4.3% for the Hungarian economy this year. According to the minister, the more than 2,800 German companies operating in Hungary, which employ more than 200,000 people, have a major role to play this.

This year's study by DUIHK specifically addressed the economic impact of the coronavirus. More than a third of companies have already returned to pre-coronavirus turnover levels, and this is expected to rise to more than 50% by the end of the year, while around 40% of respondents expect to return to pre-COVID turnover levels only in 2022 or later. 

One of the long-term consequences of the crisis could be the transformation of global production and supply chains. According to the survey, one in two companies - both in Hungary and in the region - are planning to expand their supplier base and replace some suppliers. In doing so, a significant proportion of those surveyed would look for new suppliers mainly in the EU countries of Central and Eastern Europe, but a large number of companies would also look for new suppliers in Western Europe. 

The vast majority of the companies surveyed - 88% - would still invest in Hungary, the highest proportion ever measured in the chamber's survey. This commitment is underlined by the fact that Hungary was considered the most attractive investment location out of 20 potential destinations in the domestic survey. 

In the aggregate of the 16 countries surveyed in the region by German Chambers of Commerce, Estonia is again the most attractive investment destination this year, ahead of the Czech Republic and Poland. Hungary was again in the middle of the field (10th out of 20 destinations), although there were only minimal differences in the top half of the field between the scores for each country.

DUIHK carried out its first business survey in 1994. This year, the survey was carried out between March 12 and April 16, with a total of 206 business leaders taking part.

Since 2006, the survey has been carried out at the same time and with the same content in several countries of Central and Eastern Europe by the German Chambers of Commerce (AHK). In 2021, the survey was carried out in 16 countries of the region, with 1,454 participants. The international survey is coordinated and analyzed by DUIHK in Budapest.

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