Hungarian businesses are in hiring mood again

Significance

Overall labour market figures have improved considerably in the past decade, and the traditionally low employment rate has now risen above the EU average. However, the government’s controversial public work scheme, serious employment gaps in several sub-segments and the persistently low allowance paid to the unemployed overshadow an otherwise positive picture.

Impacts

• Current demographic trends shrinking the potential labour force will intensify a labour shortage.
• Shorter supply chains due to the pandemic driving up global transport costs will further increase local labour demand.
• In-depth reforms in education will be needed if Hungary is to shift to an innovation-led economy and break out of the middle-income trap.