Hungary’s investment appeal could weaken

Significance

The erosion of the rule of law and systemic corruption have not had a substantial impact on capital attraction. Despite occasional anti-capitalist rhetoric and measures to expel foreign companies in some sectors such as media, banking and energy, the government makes individual deals with multinational firms and tries to accommodate them into a 'new normal' based on loyalty to it.

Impacts

• Prime Minister Viktor Orban’s Fidesz party has a slightly better chance of winning the elections than its main rival.
• Hungary would adopt a tough position towards China if the united opposition won the election.
• Germany’s pragmatic and economy-first approach to Hungary will not change following its own September 27 elections.