Economic Outlook: More of the Same, or a Winter Chill


I read a report the other day that said the winter, thus far, has been unusually mild, which could lead to reduced utility bills and even, possibly, lower prices. That is obviously good news, though I might have been tempted to believe it more if I had not been shivering at the time. 

My day starts at 6:30 each morning, editing our daily Hungary A.M. newsletter, followed by breakfast, followed by a half-hour walk with the dogs in the woods. It doesn’t feel mild then, I can tell you. For the last week or so (at least where I live), we have been locked into a period of thick fog and freezing temperatures. The weather app on my phone has barely changed for days now: “-3˚C; feels like -7˚C.”

The key question, as we move properly into the new business year is not whether I am feeling the chill of winter, but rather if the Hungarian economy will do so.

We all know that Hungary impressively outperformed not just the European Union average in terms of economic growth, but just about everybody’s expectations. I have enjoyed reading the comments of many of the leading analysts in this issue (see both our Macroscope report opposite, and our Special Report on The Year Ahead). The one that really struck was almost plaintive: “No one expected that rate of growth.” (My italics.)

Taken in totality, you begin to wonder if there is a sense among the analysts that Hungary dodged a bullet in 2019. And whether it could repeat that neat trick in 2020. The underlying fundamentals have not changed greatly from last year to this, although the fact that there will be less EU money to draw on (Hungary having, again, been extremely efficient in accessing what was available) feels like it might well be a key point of difference. The important question is whether the November industrial data, which disappointed somewhat, was an outlier, or a way marker. Again, the fact that industrial output has now fallen for two months in a row might, might, be significant. 

Time will tell, and I am far from a fully paid up member of the analysts’ association. As Citi’s Central European CEO and Hungary country head Kevin A. Murray said recently, in an interview for another of our forthcoming publications, “I’m not overly concerned with the economy. The biggest challenge there is that people will talk themselves into a recession.” 

That sounds like a very good cue for me to stop. Whatever your business, I hope it proves robust and prosperous in 2020. Happy New Year!

Robin Marshall


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