Magazine: Economic conference started the year

At HG Media’s conference the representatives of enterprises, economic experts and government representatives were discussing the opportunities and threats ahead of us in 2018. The first speaker was István Lepsényi, deputy state secretary for economic development and regulation at the Ministry for National Economy. He told that Hungary is on a stable growth path as the GDP is expected to be around 4 percent by the end of the year. The budget deficit is below the 2-percent threshold and all the macroeconomic indicators are good.

Mr Lepsényi is of the opinion that 2018 is going to be an interesting year due to the Brexit, the policy of the US government and the level of China’s economic growth. He stressed the fact that the level of investment has been growing for two years in Hungary, and wages kept rising as well – last year by 12.8 percent on average. The government calculates with a 2.7-percent inflation rate. Mr Lepsényi added that the government’s step to reduce the corporate tax to 9 percent – this is the lowest rate in the EU – will bring foreign capital to Hungary and create chances for domestic companies to invest more in development.

Nándor Csepreghy, state secretary and deputy minister at the Prime Minister’s Office was the next speaker. He pointed out that Hungary’s interest is to strengthen the European Union by making the member states stronger. After the UK will have let the EU in 2019, we will have to find a way to integrate the countries in the Balkan Peninsula into the EU. Mr Csepreghy believes that the engine of the EU’s economic growth is Central and Eastern Europe. If the economies in Eastern Europe aren’t developing, economic growth slows down in Western Europe too.

At the moment one of the most important questions is how the EU-level development policy – which starts from 2020 – will be financed. Hungary has made a recommendation about this for Brussels, which says that Hungary’s interest is a strong European Union, and that the European community should take it into consideration that 20 years after the political transformation of the region we are still lagging behind economically.

A roundtable discussion followed, where László Krisán, president of the Budapest Chamber of Commerce and Industry and the CEO of KAVOSZ told: it isn’t true that SMEs have used European Union funding inefficiently. He thinks that the fact that many enterprises survived the economic recession between 2008 and 2012 proves that the EU money was utilised well. He added that 75 percent of workers are employed in the SME sector in Hungary.

András Vértes, president of GKI Economic Research Institute Zrt. spoke about the importance of competitiveness. He revealed that Hungary is only 60th in the world competitiveness ranking, while 20 years ago we were in the 30th position. He is of the opinion that state presence is too strong in the market competition in Hungary. Mr Vértes believes that education, healthcare, stable and independent institutions, and a stable legal background are also necessary from a competitiveness perspective. The head of GKI reckons that Hungary is lacking these at the moment.

Richárd Végh, president-CEO of Budapest Stock Exchange Zrt. informed that the BUX index kept rising in 2017 – for the third year in a row – and the 23-percent increase is a good performance event at world level. This was the result of a good macroeconomic environment in Hungary. Mr Végh opines that Hungary would need a livelier stock market, which would also be good because companies wouldn’t only depend on bank loans then. Dr Ádám Balog, president-CEO of MKB Bank said that the bank sector has had a few good years and this is the time when banks need to strengthen themselves and prepare for the years which won’t be this good.

In the next roundtable discussion Zsanett Oláh, CEO of the Hungarian National Trading House Zrt. (MNKH) expressed her opinion that it is very important for the trading house’s network to be present in every part of the world, because every sector where Hungarian enterprises create their own products can be competitive somewhere.MNKH can provide enterprises with information about where they have a good chance for market entry. This means that they can concentrate on those countries where they can be competitive. Ms Oláh added that most of the time Hungarian enterprises don’t suffer from the lack of capital, but from a lack of information and the necessary connections.

The last discussion covered the topic of multinational companies in Hungary, consumption trends and the conquest of e-commerce. Gabriella Heiszler, managing director of SPAR Hungary told that we are living in a digital era, when various digital devices and technologies are already present in grocery stores, e.g. self-service checkout.One of the most important challenges today is reacting swiftly to the changes in workers’ tasks resulting from the adoption of digital technology. //