Editorial: A Positive Start to 2023. What Next?


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It used to be fashionable around the end of the year for news organizations to offer a “school report” on the government of the day. Perhaps it was just an excuse foreditors who had been bullied by teachers at school towrite “must do better” headlines, but it rather seems tohave fallen out of fashion.

One reason is that in the past few years, the business of government seems to have become increasingly reactive rather than proactive. It is already a problem that political expediency makes most politicians short-termist by nature. Plans that could affect real change in any area of life are almost by definition long-term, while party politics deals in four- or five-year election cycles. Add a pandemic to that, or a global economic slowdown, or rampant inflation, or (which, we had convinced ourselves seemed the least likely outcome until February 24, 2022) war and even the best-laid plans and aspirations are likely to be thrown out of thewindow, along with the baby and the bathwater, inthe rush to “get things done now.”

Viktor Orbán is, by many definitions, an unusual politician. Most party leaders would surely give a minor body part to still be in power after 12 years of uninterrupted election success, four consecutive election cycles that will see him keep control of the levers of power at least until 2026 unless something very unexpected happens. (The car crash that was British politics in 2022 might suggest we should all be prepared for “something very unexpected,” but Idigress.) But even our Prime Minister is not immune to the demands of political reality, which is why he has been so keen and so vocal to blame Hungary’s European-leading inflation on the war in Ukraine. But as our Macroscope article this issue points out, Hungary was already experiencing growing inflationary pressure before the war.

Given the potentially toxic mix of economic headwinds Hungary faced towards the end of last year, not least what was happening to the forint, Ifound the outlook of Zoltán Török, head of research at Raiffeisen Bank, who we spoke to for Macroscope, surprisingly upbeat. To be clear, he is not saying Hungary is about to enter a land of economic milk andhoney, and his concluding line is “I don’t think it is gonna last,” but recent experience suggests weshould take what we can, when we can.

There has been movement on the EU funds (we have a story on that, too), though this is a saga that surely still has some twists and turns todeliver. The forint has recovered somewhat, a fact not unconnected to that agreement signed with the European Commission. The government was able to organize a significant bond issue, three times over-subscribed, according to Minister of Finance Mihály Varga. The budget deficit appears to be back under control. There will probably be less good news about inflation, with the December data due today, but it is nice to start the year with something positive in mind. Wouldn’t it be nice to think we could get back to the days when all we had to worry about was“business as usual?” Happy New Year, folks.

Robin Marshall


This article was first published in the Budapest Business Journal print issue of January 13, 2023.


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