VOL. 32. NUMBER 1 | JANUARY 12 – JANUARY 25, 2024
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HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BUDAPESTBUSINESSJOURNAL.COM
SPECIAL REPORT INSIDE THIS ISSUE
The Year Ahead
The Economic Crystal Ball: Expectations for Hungary in 2024 Economic experts highlight the changes they expect in Hungary’s economy for the upcoming year, discussing GDP, inflation, foreseeable changes in national legislation and the development of relations between Hungary and the European Union. 12
Real Estate Market Looks for Upturn It is an open question when investment activity in Hungary will pick up after concerns over the cost of finance, and the uncertain economic and geo-political environment. Another worry is how long yield corrections will continue. 15
Research Royalty
SOCIALITE
A Wander Down Budapest’s Broadway David Holzer takes a stroll along the area around the junction of Nagymező utca and Andrássy út, better known to locals as the Budapest Broadway, replete with theaters, bars, statues and stars. 17
NEWS
Orbán Makes Offer on Ukraine Funding Veto Hungary may be willing to lift its veto on EUR 50 billion in EU financial aid to Ukraine if the European Council were open to approving the funding on an annual basis, PM Viktor Orbán indicated in a proposal submitted during an ad hoc working party on Jan. 5, according to a report from Politico. 5
BUSINESS
Corvinus University professor Tünde Tátrai has been named among the world’s top 10 public procurement researchers, based on four decades of work. She is the only Hungarian on the list, and the second best placed woman. 9 BUSINESS
Fashion Takes Center Stage in Budapest Again
For the 13th time, the Hungarian Fashion & Design Agency will organize Budapest Central European Fashion Week from Jan. 22-28, with the Museum of Fine Arts as the main venue and diverse programs focusing on Generation Z. 8
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Budapest Business Journal | January 12 – January 25, 2024
IMPRESSUM EDITOR-IN-CHIEF: Robin Marshall EDITORIAL CONTRIBUTORS: Luca Albert,
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THE EDITOR SAYS
‘TIS THE SEASON OF GIVE AND TAKE This really has been the season of giving and, therefore, also of receiving. Hungary has been doing plenty of the latter, though it has also made some moves towards the former. In November, the European Commission announced Hungary would be given access to EUR 920 million in funding without any strings attached. That money comes from Hungary’s revised COVID-19 recovery and resilience plan and is part of a scheme called “RePower EU,” drawn up in response to Russia’s invasion of Ukraine to help Europe diversify away from imported fossil fuels and accelerate the green transition. The funding, which Hungary will get in two tranches this year, is effectively seed money to provide liquidity and help jump-start clean energy projects. It sounds a lot, and it is. But Hungary has been told that, to unlock the remaining EUR 9.5 bln of RRF money, it will have to fulfill 27 so-called “super milestones” and four “horizontal enabling conditions” (it would not be the European Union without potentially bamboozling jargon). These are essentially reforms to fight corruption and restore the rule of law. There was a further EUR 22 billion in cohesion funds frozen since December 2022. Even better news came for Hungary in December, when the EC announced the release of EUR 10 billion in cohesion funds (according to IntelliNews, that represents three years of cohesion funding), saying Hungary had made the progress the commission required on judicial reform. This was important for several reasons. Some of it was symbolic: it enabled Viktor Orbán’s government to proclaim a victory domestically and rehash its argument that it was fighting the “enemies” in Brussels to win what was rightfully due it. More importantly, it gives
the rating agencies greater confidence that a deal can be done to unlock all the funding and makes it less likely they will downgrade Hungary, making debt financing more expensive. EUR 11.7 bln in funding remains frozen, with Hungary being asked to take action on corruption, asylum seekers, its anti-LGBT+ law and concerns over academic freedom before it is released. After all that receiving, it was time for Hungary to do some giving, and that it did this week, in a move that surprised many. At the EU’s December summit, Orbán, at the suggestion of the German Chancellor, had stepped out for a metaphorical coffee break to allow the other 26 member states to vote unanimously to open accession talks with Ukraine. A few hours later, however, he vetoed a four-year EUR 50 mln financial aid package, saying it should not come from the EU budget. In the intervening period, I am told he has come under increasing pressure from other leaders to drop his veto while they have, in parallel, been exploring ways to work around Hungarian opposition. Perhaps the pressure began to tell. Then again, perhaps Orbán, currently the longestserving PM in the EU, saw the potential for more deals to release more money. Either way, citing three EU diplomats, Politico reported on Jan. 9 that Hungary had suggested it would drop its veto if the aid package were voted on annually in EUR 12.5 bln tranches. If nothing else, it would give the Hungarian PM four opportunities to block the aid, or at least dangle the threat of doing so in the hope of some quid pro quo. Interesting times lie ahead. Happy New Year! Robin Marshall Editor-in-chief
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In the color picture from state news agency MTI, taken on Dec. 30, 2023, people preparing to celebrate New Year’s Eve pose with party accessories at a street vendor’s stand in District XVIII. In the black-and-white picture dating from 1977 taken Photo by Szilárd Koszticsák / MTI
• Crisis Management. We have all lived through a once-in-a-century pandemic. But we also face an existential threat through climate change and operate in a period where disruptive technologies offer threats and opportunities. Now, more than ever, factual business reporting is vital to good decision-making.
Photo by Sándor Kereki / Fortepan
THEN & NOW
from the Fortepan public archive, a street vendor is seen showing off his wares for NYE on Erszébet körút (then named Lenin körút).
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Budapest Business Journal | January 12 – January 25, 2024
News
• macroscope
Government Bullish on Economic Prospects for 2024;
Independent Voices Stress Budget Projections may be Optimistic With inflation falling to 7.9% in November, improving current account and trade balances, and the economy emerging from recession in the third quarter, the government is upbeat on its outlook for the coming year.
Industrial Production in Hungary, 2001-2023 (January-November) Production volume index, same period of previous year equals 100
KESTER EDDY
“[We expect] a happier and more successful year to come, […] economic growth of around 4% is not merely wishful thinking, but a fairly likely scenario, based on real analysis,” Minister for National Economy Márton Nagy told website Index in an opinion piece published on Jan. 3. Last year had been “especially a year of fighting inflation,” Nagy said, reiterating the government line that this was down to “the impacts of the war and the flawed sanctions” imposed by the European Union. Ultimately, though, Hungary had “succeeded in defending the work-based and pro-family regime that constitutes the very basis of our economic and social system.” In this regard, the minister alluded to (though he avoided citing the numbers) Prime Minister Viktor Orbán, who told pro-government television channel TV2 shortly before Christmas that, while the government had planned for inflation at 6% in 2024, “it now seems more likely that inflation will be lower, even as low as 5%.” In the same interview, Orbán was even more optimistic about the economy than his minister. “My feeling is that we are on a good path,” he said, predicting growth would accelerate to approach “the average annual growth of
around
5%
experienced in previous years,” all helped by a “dynamic increase of the minimum wage and guaranteed wage minimum by 15% and 10% respectively.” Nagy was equally buoyant on wages, saying the rise in real wages had resumed in September last year and, as an
Source:
Negative Effect
Moreover, consumption has not rebounded as well as expected, which has a negative effect on the VAT tax base in 2024, and interest expenses on state debt could well be higher than expected, depending on the evolution of interest rates during the year. “The above risk factors are intensified by the debates in the government concerning how fast the deficit should be brought down below the 3% threshold. As a result, it is questionable if the adjustments will be made during the year to keep the 2.9% deficit target,” Gergely Tardos, chief economist at OTP Bank, comments. Nor is the government’s propensity to overspend likely to be curbed by pressure from the European Commission, Tardos argues, which, given the general economic weakness in the European Union, is likely to continue taking a lenient approach to state spending. “The commission is also not likely to demand [Hungary] reach the 3% threshold
in
essential pillar in the return of economic growth, would accelerate to near “the average annual growth of around 5%.” Such real wage growth was essential, he said to fulfil both the government’s number one aim of supporting the welfare of Hungarian families and to restore levels of retail consumption after the decline in the past year. Not all observers are as sanguine on the immediate economic outlook, however. Indeed, Hungary’s own Fiscal Council was unusually critical in its analysis of the 2024 budget, warning that it contained “major risks,” website Portfolio reported on Jan. 5.
More Realistic
In particular, the council predicted that economic growth would likely be slower than expected, with 3% a more realistic target, and that the state debt would not shrink relative to GDP. Although this latter figure had fallen from 79.3% in 2020 to 73.9% in 2022, and the decline continued last year, to maintain this trend, the government needs to reduce the budget deficit significantly or boost real GDP growth. However, to achieve higher growth, Hungary needs “comprehensive reforms” to improve competitiveness and increase productivity, the council argues. In its first analysis of the year, OTP Bank focused on the budget deficits for both 2023 and 2024. It now predicts
that last year’s deficit, which struggled with lower-than-expected VAT returns as consumer spending slumped, will amount to 5.9% of GDP, higher than the 5.2% deficit target set in October but in line with the end-year revision of the government. However, this figure will be primarily achieved by last-minute adjustments, namely an unexpected dividend payment of HUF 309 billion (equal to 0.4% of GDP) paid into state coffers in November by MVM, the state-owned electricity company, and a reduction in the planned energy subsidies of some HUF 450 bln (equal to roughly 0.6% of GDP). Without these significant injections, the budget deficit would have been very close to the
7% of GDP
figure predicted by the bank last fall. OTP has also voiced doubts about this year’s official deficit target of 2.4% of GDP, warning that the figure is more likely to be in the range of 4-5%. It notes that following the significant cut-back on investments this year, a second round of cuts, as envisaged in the budget, will be more challenging to implement. In addition, the wages of public employees, including teachers, failed to match inflation last year and will have to be compensated for in the near future.
2024
in an excessive deficit procedure following the high shortfall last year; instead, it is expected to advise a more gradual deficit reduction plan and to reach the Maastricht criteria later,” Tardos concludes. Indeed, iBanFirst, a French-owned financial services company based in Belgium, points to what it terms the current “fragility of the European economy” caused by a delayed postCOVID economic recovery, an ongoing energy crisis, and declining exports. A recession in Western Europe will hit Hungarian manufacturing exports. As iBanFirst warns, even the threat of that will lead to an increased risk of exchange rate fluctuations, making planning for Hungarian exporters more complex and more costly. Such uncertainties seem to have affected the thinking of the Hungarian on the street (or, in this case, on the waiting concourse of Budapest’s Déli railway terminus) as experienced by the Budapest Business Journal prior to deadline, with passengers picked at random expressing doubts as to the government’s optimism. “I’d like to believe it all, but these [government forecasts] are just that, forecasts,” student Mátyás Kovács told the paper while waiting for the train home towards Balaton. “We have to see if they are actually realized.”
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Budapest Business Journal | January 12 – January 25, 2024
HelloParks MG3 Achieves Breeam ‘Outstanding’ Accreditation The 45,000 sqm MG3 warehouse at HelloParks Maglód is the first industrial property in Hungary to achieve Breeam’s “Outstanding” sustainability rating for New Construction, the highest standard in the third-party accreditation system.
GARY J. MORRELL
All of the company’s warehouses abide by these sustainability specifications and are EU Taxonomy aligned. The development also fits with HelloParks’ climate neutrality roadmap, according to the prolific industrial developer, which is part of the Futureal Group. “The advantages of state-of-the-art, energy-efficient mega parks are also becoming increasingly important for tenants, as measurable sustainability targets have become an integral part of corporate strategy,” says Rudolf Nemes, CEO of HelloParks. “The value of sustainable building techniques are, therefore, becoming more apparent since carbon-neutral industrial properties significantly contribute to the achievement of these goals. The eco-friendly operation not only benefits the building’s occupants but also the surrounding communities,” he insists. The developer was previously the first in Hungary to attain a Breeam “Excellent” rating in the industrial real estate category, with the MG1 hall in the same industrial park, located some
40 km southeast
of central Budapest by road. HelloParks attained its latest rating with the assistance of Abud Mérnökiroda.
Real Estate Matters A biweekly look at real estate issues in Hungary and the region
The interior of the MG3 warehouse at HelloParks Maglód. It is the first industrial property in Hungary to achieve Breeam’s “Outstanding” sustainability rating for New Construction, the highest standard in the third-party accreditation system. The targets outlined in the HelloZero ESG strategy, introduced last year, meet the United Nations’ sustainable development goals to comply with the Paris Agreement’s objective to limit the increase in global temperature to 1.5°C.
István Pozderka, business development director and co-founding partner of HelloParks. The organization has established an exclusive carbon reduction roadmap up to 2035. Sustainable water and waste
management are key priorities, in addition to mitigating climate change, with a constant focus on biodiversity. The firm plans to reduce embodied carbon emissions for new buildings by 25% from 2025 and 50% from 2030 when compared to the developer’s previous buildings, which already meet levels similar to Western European developments.
the growing demand for sustainable buildings that enable efficient operations,” says István Pozderka, business development director and co-founding partner of HelloParks. The developer has now started constructing a 60,000 sqm warehouse on a
100% Renewable Energy
in Alsónémedi (about 30 km south of the capital by road), close to the junction of the M0 and M5 motorways. The big box building is slated for completion in Q4 2024. This building, together with the development of the PT2 and PT3 halls in Páty, is expected to result in the delivery of 144,000 sqm of new industrial space by HelloParks next year. “The real estate sector is the biggest energy consumer in the EU; hence, it carries a significant responsibility to fulfill climate neutrality criteria. Such an achievement calls for a substantial reform of current practices, which we have perceived as a promising opportunity from the beginning,” says Anna Bencze, head of sustainability at HelloParks. “The industry must anticipate forthcoming scenarios that would satisfy the interests of the environment, local communities and businesses alike. Our explicit goal is to motivate the entire industry through our ambitious targets,” she adds.
In addition, each facility will have an average solar capacity of 2.5 MW installed. The goal is to achieve net-zero emissions for the operational carbon footprint of new buildings by 2028 and ensure a 100% renewable energy supply, says the developer. A relative newcomer, HelloParks leased more than 150,000 sqm of warehouse space in 2023 and has delivered 267,000 sqm of industrial development over the past two years. Last year, the developer handed over four new buildings totaling 174,000 sqm in parks at Maglód, Fót (25 km northeast of the capital) and Páty (20 km west). “We started three years ago, and by today, we have successfully leased [more than] 250,000 sqm of warehouse space, and we can reach half a million sqm of completed building in a year and a half. An important factor in our growth, in addition to the increase in complex manufacturing and assembly activities, has been
14-hectare site
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Budapest Business Journal | January 12 – January 25, 2024
News | 5
Orbán Makes New Year Offer Ukraine on his Ukraine Funding Veto Crisis Roundup Hungary may be willing to lift its veto on EUR 50 billion in European Union financial aid to Ukraine if the European Council were open to approving portions of the funding on an annual basis, Prime Minister Viktor Orbán indicated in a proposal submitted during an ad hoc working party on the EU’s Multiannual Financial Framework on Jan. 5, according to a report from Politico. NICHOLAS PONGRATZ
The move would involve disbursing the EUR 50 bln aid package in increments of EUR 12.5 bln (USD 13.7 bln) over the course of four years, pending unanimous yearly approval. While, practically, this would mean that Orbán could feasibly block the EU funding each year in order to gain concessions from Brussels for withholding his veto, it also indicates that pressure on Orbán to accept the aid package by the coming EU
summit on
Feb. 1
could be coming to bear. At the previous summit on Dec. 14-15, Orbán was the sole EU leader to withhold his approval for the funding, which requires unanimous agreement to pass, despite suggesting a day earlier that he might be open to compromise
In this photo released by the Press Office of the Prime Minister, Prime Minister Viktor Orbán (center right) and Turkish President Recep Tayyip Erdogan (center left) are seen during a plenary session at the Carmelite Monastery on Dec. 18, 2023. Alongside Orbán, working from nearest the camera, are ministers Csaba Lantos (energy), János Lázár (construction and transport), Márton Nagy (economic development), Sándor Pintér (interior), Kristóf Szalay-Bobrovniczky (defense) and János Bóka (EU affairs). Hungary and Turkey are still the only holdouts to Sweden’s application to join NATO in the wake of Russia’s invasion of Ukraine. Photo by Vivien Cher Benko / Prime Minister’s Press Office / MTI. following an EU concession. On Dec. 13, the EU decided to release more than EUR 10 bln in funds to Hungary, roughly one-third of the money it has withheld over rule-oflaw and graft concerns. While the European Commission said in a statement that it released the funds because of its satisfaction with laws Orbán’s government had passed to strengthen judicial independence, the Prime Minister had insisted on Hungary receiving its own funding before he would consider backing support for Ukraine.
Financial, Strategic or Policy “I’m ready to make a financial deal on financial issues,” Orbán told the Mandiner weekly podcast the same day. “But I’m not ready to make a financial deal on strategic or policy issues,” he said, suggesting he would torpedo Ukraine’s efforts at opening accession talks with the EU. In fact, he did just the opposite. Although Orbán followed through with blocking the financial aid package for Ukraine, he tacitly allowed the EU to start membership
negotiations with Ukraine by effectively abstaining. Following three hours of deadlock, Politico reported that German Chancellor Olaf Scholz had suggested to Orbán, among his EU counterparts, that if he really wasn’t open to compromise, he should consider briefly leaving the room. This solution would enable the other
26
member states
in agreement to approve opening accession talks, while Orbán could still say he had not voted in favor, as according to EU rules, unanimity can still be fulfilled if one leader is absent. Relating his own experience of the “long and difficult” debate over the course of eight hours, Orbán told Kossuth Rádió on Dec. 15 he had tried to convince his counterparts that Ukraine was “unprepared to become an EU member,” but “they couldn’t be persuaded. I tried to explain that helping badly is worse than not helping at all,” he added. Orbán said that by leaving the room, Hungary did not block the decision but would bear no responsibility for it, emphasizing that the “bad decision” would “not weigh on Hungary’s conscience.”
Yet, some EU officials are said to be growing fed up with Orbán’s obstructionism and are considering invoking Article 7 of the EU Treaty against Hungary, which could lead to the suspension of its voting rights, according to a report from the Financial Times. Although any single EU member state could veto this process, Hungary “no longer has a guaranteed protector,” as erstwhile ally Poland recently elected its liberal opposition to power, bringing it more in line with EU orthodoxy.
“I’m ready to make a financial deal on financial issues. But I’m not ready to make a financial deal on strategic or policy issues.” However, many within the bloc remain apprehensive about wielding “the EU’s biggest weapon against a member state” and would still prefer to persuade Orbán to cooperate voluntarily or to seek alternative means of providing support to Ukraine without Hungary.
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Budapest Business Journal | January 12 – January 25, 2024
in Brief
Debrecen Undergoing HUF 700 bln Infrastructure Development Hungary will undertake a HUF 700 billion (USD 2 billion) infrastructure development project in Debrecen (225 km east of Budapest) that will help transform the country’s second-largest city into one of Europe’s most significant battery production hubs, according to Bloomberg News. The upgrade will affect transportation, roads, potable water, and waste-water management, Minister of Construction and Transport János Lázár said at a briefing in Debrecen. He said the investments come on top of direct subsidies to companies. Debrecen has attracted EUR 12.5 billion in foreign direct investment over the past eight years, including from the likes of BMW, Catl and other battery makers and
suppliers. The jobs those companies will bring to the area will boost Debrecen’s population by 25% to 250,000, requiring further investments beyond that just announced, Lázár said.
Industrial Sector Output Falls 5.8% Y.O.Y. The output of Hungary’s industrial sector decreased for the 11th straight month in November, and at a faster pace, falling by 5.8% year-on-year, accelerating from a 3.2% decline in October, according to data released by the Central Statistical Office (KSH) on Jan. 9. November output dropped 5.6% when adjusted for the number of workdays. Production of most manufacturing sector branches declined, with the exception of the coke and refined petroleum products and the chemicals and chemical products branches, KSH said. In a month-
on-month comparison, output fell a seasonally- and workday-adjusted 2.3%. For the period January-November, output dropped 4.8% year-on-year. KSH will release detailed data on the production of all industrial sector branches on Jan. 12.
“significant pressure.” Despite the unfavorable circumstances, the 20223 budget had ensured the preservation of the value of pensions, the continuation of family subsidies and the regulated utility price scheme for households and would do so again in 2024, it added.
Gov’t Deficit Reaches HUF 4.593 tln
Roughly 120,000 Guest Workers in Hungary
Hungary’s cash flow-based government deficit reached HUF 4.5934 trillion at the end of December, the Ministry of Finance said in a preliminary reading of data released on its website on Jan. 9. The central budget deficit reached HUF 4.293 tln at the end of the month, and the social security funds were HUF 412.3 billion in the red. Separate state funds had a HUF 112.3 bln surplus. The government deficit widened from HUF 4.074 tln at the end of November, but the ministry noted that the full-year gap was under 2022’s HUF 4.672 tln. The finance ministry said the war, the energy crisis resulting from sanctions policies, and the high-risk global economic environment had put the budget under
Approximately 120,000 foreigners are present as guest workers in Hungary, according to State Secretary for Employment Policy Sándor Czomba. The majority, about 40,000, are Ukrainian citizens. In addition,16,000 Vietnamese and slightly more than 10,000 Filipinos work in Hungary. The number of other national groups, such as Indians and Mongolians, are all well under 10,000. Czomba added that Hungary still has the fewest guest workers, at 1.8% of the total workforce, while in Poland and the Czech Republic, the numbers are 6% and 4.5%, respectively.
Herzl Tivadar tér Temporarily Renamed October 7 Square Herzl Tivadar tér in front of the Dohány utca Synagogue has been renamed October 7 tér for two weeks in memory of the victims of the attack by Hamas terrorists, according to a press release from the Budapest Municipal Council. The Federation of Hungarian Jewish Communities (Mazsihisz), the Budapest Jewish
Religious Community (BZsH) and Budapest City Hall organized the commemoration on Jan. 7 and the renaming of the square. Israeli Ambassador to Hungary Yacov Hadas-Handelsman expressed gratitude for the symbolic renaming of the square and Hungarian solidarity. He said the temporary renaming was
“symbolic” as Tivadar Herzl, known outside Hungary as Theodor Herzl, the Austro-Hungarian Jewish journalist and political activist who formed the Zionist Organization and dreamed of the formation of the state of Israel, was born here, and the perpetrators of the October 7 terrorist attack had wanted to destroy his dream.
Fewest Jobseeker Numbers Since Regime Change The number of registered jobseekers was at its lowest in 2023 since the regime change, the Ministry of National Economy reported on its website after the National Employment Service published the latest figures. According to the data, an average of 232,000 job seekers per month were registered last year, which was 6,000 better than in the previous record year of 2022.
Retail Sales Fall 5.4% y.o.y. in November Retail sales in Hungary fell 5.4% yearon-year in November, according to data released by the Central Statistical Office (KSH) on Jan. 8. Retail sales dropped at the same rate when adjusted for calendar year effects. Adjusted food sales edged down 0.6%, non-food sales fell 3.9%, and vehicle fuel sales were 21.4% lower. Retail sales have declined for a year. A detailed breakdown of the data shows that adjusted retail sales fell in all types of shops except pharmacies and drugstores. Sales in supermarkets stagnated. Retail sales edged up 0.8% in a month-onmonth comparison.
Trade Surplus at EUR 1.718 bln in November
From left, Budapest Mayor Gergely Karácsony, Andor Grósz, president of the Federation of Jewish Communities in Hungary (Mazsihisz), Tamás Mester, president of the Jewish Community of Budapest and vice president of Mazsihisz, and Péter Niedermüller, Mayor of Erzsébetváros (both half hidden), and Israeli Ambassador Yakov Hadas-Handelsman at the unveiling of the temporary street name sign in front of the Dohány utca Synagogue. Photo by Péter Lakatos / MTI.
Hungary’s trade surplus reached EUR 1.718 billion in November, widening from EUR 1.003 bln in the previous month, the Central Statistical Office (KSH) said in a preliminary reading of data on Jan. 4. Exports slipped 3.8% year-on-year to EUR 12.896 bln. Imports dropped 24.7% to EUR 11.178 bln, the steepest decline in more than three years. Trade with other European Union member states accounted for 77% of Hungary’s exports and 75% of its imports during the month. For January-November, Hungary’s exports rose 5.5% to EUR 138.532 bln, while imports fell 8% to EUR 128.884 bln. The trade surplus reached EUR 9.647 bln.
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Budapest Business Journal | January 12 – January 25, 2024
7 in 10 Hungarians see Fruit and Veg as Critical to Healthy Diet
News | 7
Health Matters Photo by Kattecat / Shutterstock.com
A monthly look at health issues in Hungar y and the region
Compared to 2022, more Hungarians are paying attention to health-conscious eating, with 60% of them including a meat-free day in their week, motivated not only by saving money but also by healthy living, according to Nestlé Hungária’s second major national “Veganuary” survey. BENCE GAÁL
Nestlé Hungária surveyed the attitudes of the Hungarian population towards healthy eating and meat consumption at the end of 2023, repeating a representative survey in 2022 on the same topic. Among other things, the research sought to find out how wellknown the “Veganuary” (an initiative aimed at reducing meat consumption) is in Hungary. It also examined how the population’s willingness to give up or reduce animal-based foods has changed over the course of a year. In 2022, approximately 52% of respondents said they would give up at least one type of animal food or meat product. This had risen to 58% at the end
of
2023,
with processed meat products and red meat particularly high on the list of things consumers are willing to give up. The proportion of those who believe reducing or eliminating red meat consumption could be the key to a healthy diet rose from 23% to 28% among those who place more emphasis on a balanced diet. Overall, compared to the previous year, the number of people paying attention to a healthy diet has increased. Fruit and vegetable consumption is still considered the most crucial aspect of this, with the proportion rising from 64% to 68%. This is followed by avoiding or reducing sugar and avoiding preservatives and colorings, which are given even more weight than in previous results. A similar trend
can be seen in the perception of fiber-rich foods. Already considered a cornerstone of a healthy diet in 2022 (47%), 6% more people thought the same at the end of 2023.
Healthy Eating and Cost Saving In theory, awareness of healthy eating is on the rise, with three in 10 people following some kind of diet and 10% restricting meat or animal foods, slightly higher than last year. Six out of 10 people surveyed eat meat several times a week, but not every day, and meatfree days are motivated primarily by a desire to save money. This is in line with previous results, but a significant difference is that the weight of financial considerations has decreased from 58% to 48%, while the weight of health reasons has risen from 12% to 18%. Interestingly, 6% of respondents said they would consider giving up meat in the future,
45% would
reduce their meat consumption, while one in three would like to try different plant-based alternatives to replace processed meat products. “It is good to see that the Hungarian population is more open to reducing meat and other animal products, as it is important for our health to have a higher proportion of plant-based foods in our diet,” says Diána Sárga, a dietician at Nestlé Hungária.
“Moreover, by eating them, we can have a positive impact not only on our bodies but also on the environment,” she adds. Nestlé notes that recent studies have shown that replacing animal products with plant-based alternatives significantly reduces the emissions, land use and water consumption associated with those products.
Environmental Footprint Unsurprisingly, given it commissioned the survey, Nestlé S.A. has some skin in this game, specifically its Garden Gourmet brand, which, the Swiss multinational says, is committed to reducing its environmental footprint in the production of its vegetarian and vegan products in several ways, including the widespread use of soil restoration practices with its farmers and suppliers. This means supporting farmers who supply soy protein, for example, by encouraging them to plant cover crops, use organic fertilizer and practice conservation tillage to improve soil health, among other things. “Research also shows that there is a high proportion of people who would like to reduce their consumption of animal products but not completely abandon them, and we also see that the proportion of people who have heard of plant-based products has gone
from
85%
to 90% by 2022,” Sárga explains. “For them, Garden Gourmet offers a tasty alternative that contributes
to their daily protein and fiber intake, in addition to a balanced diet. With these delicacies, we offer plant-based products that can help those who have not yet done so to include a meat-free day or two in their diet, even as part of a vegan January,” she concludes. Nestlé’s survey showed that a quarter of the population has heard of the “Veganuary” initiative and that, even if only to a small extent, the percentage of people open to trying it is increasing year-on-year.
About Veganuary According to its website, Veganuary is a non-profit organization that “encourages people worldwide to try vegan for January and beyond.” It claims that “millions of people” have signed up for its onemonth vegan pledge since its launch in 2014. It is registered as a charity in England and Wales. “Our mission is to inspire and support people to try vegan, drive corporate change, and create a global mass movement championing compassionate food choices with the aim of ending animal farming, protecting the planet, and improving human health,” the organization says. For more information, see veganuary.com.
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Budapest Business Journal | January 12 – January 25, 2024
Business
Fashion Takes Center Stage in Budapest Again With BCEFW
For the 13th time, the Hungarian Fashion & Design Agency (MDDÜ) will organize Budapest Central European Fashion Week from Jan. 22-28, with the Museum of Fine Arts as the main venue and diverse programs focusing on Generation Z. BBJ STAFF
“The event will bring a meeting of tradition and modernity, preservation and contemporary spirit to the public,” the organizers said in a press statement. Budapest Central European Fashion Week has become one of the most influential fashion events in the region, a premier platform for professionals, buyers, designers,
About Budapest Central European Fashion Week The Budapest Central European Fashion Week has been held twice a year since its creation in 2018. The event has become a prime meeting point for the general public, buyers, designers, influencers, and national and international media in the region. BCEFW’s events contribute to Hungary’s tourism attractiveness and the growth of the national economy, provide visibility for Hungarian brands and can generate international orders.
Photos by David Ajkai; models: Aliz Menyhért & Zafirah Palma, Visage Management; art direction, production: The Sparkle Content Agency; hair: Ráhel Kis; makeup: Bernadett Titkos; styling: Dora Mojzes; clothes by Cukovy.
and the national and international media to meet, MDDÜ insists. More than
20
brands
will be presented at the 2024 edition. In addition to Hungarian entrants, the public will also be able to see the work of designers from across the region, in line with the aim of the fashion week to act as a bridge between CEE countries on the professional scene. The central event will provide an opportunity to increase the export activities of the creative industries and will also serve as a springboard for brands to enter international markets. The catwalk shows and collective presentations will be hosted in the Museum of Fine Arts and its surroundings around Heroes’ Square.
“A key objective of the MDDÜ’s strategy is to strengthen the position of the Hungarian fashion and design industry on the regional stage, and the events organized in this spirit will also enhance the country’s tourist attractiveness.”
About the MDDÜ The Hungarian Fashion & Design Agency was established in 2018 to provide efficient and structured support to all players in the fashion and design sector along several strategic pillars: to establish professional coordination, improve the availability and commercial opportunities of domestic products, and develop production and education. To achieve these objectives, MDDÜ organizes annual national events such as the Budapest Central European Fashion Week and the international award-winning 360 Design Budapest exhibition. In addition, Hungarian designers have the opportunity to exhibit and showcase their work at professional events abroad, such as Milano Fashion Week or the Maison&Objet and Milan Design Week fairs. MDDÜ’s main tasks include strategic cooperation with professional organizations, increasing exports and supporting the professional development of Hungarian brands through mentoring programs. The agency’s main objective is to integrate the Hungarian fashion and design industry into the international professional circuit and, in the longer term, to transform Budapest into a regional center, strengthening the country’s image.
“A key objective of the MDDÜ’s strategy is to strengthen the position of the Hungarian fashion and design industry on the regional stage, and the events organized in this spirit will also enhance the country’s tourist attractiveness,” says Zsófia Jakab, CEO of the Hungarian Fashion & Design Agency. “The choice of the BCEFW venue is also very advantageous from the point of view of the country’s image, as the interested visitors, international professional audience and media representatives will visit the Museum of Fine Arts, the City Park, Heroes’ Square and the HAB building on Andrássy Avenue, one of the most important tourist centers of the capital,” she adds.
Informal Fashion Hub
Last season, the Fashion Hub concept was introduced for the first time. Following the professional practice of international fashion weeks, the free thematic programs offered here present the fashion world more informally. For 2024, the Fashion Hub returns and will be located in the Hungarian Art and Business building on Andrássy Avenue. The round-table discussions, professional lectures, and workshops on sustainability and technological innovations are explicitly aimed at members of Gen. Z to inspire them toward a career in fashion.
Clothes by Abodi.
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Budapest Business Journal | January 12 – January 25, 2024
Hungarian Professor Among World’s Top 10 Public Procurement Researchers Tünde Tátrai, a professor at Corvinus University and a member of the Public Procurement Authority, has been voted among the top 10 researchers in the world specializing in public procurement, according to an international study that analyzed the professional articles of nearly 1,300 authors from the past four decades.
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from the Organisation for Economic Cooperation and Development (OECD). The study, led by Abderahman Rejeb, found that public procurement research has grown exponentially since 2009, although institutional collaboration is fragmented. The analysis also identified the five most typical directions of public procurement research, namely innovation, corruption, sustainability, contracts, and small and medium-sized businesses, which have been part of the curriculum of the Corvinus public procurement management program for several years.
About Corvinus University of Budapest BBJ STAFF
The university announced the honor on Jan. 4. In a press statement, it said the study had been published a few months ago in the Journal of Public Procurement, the leading publication for the profession. It examined the literature published on the subject since the beginning of public procurement research between 1984 and May 2022. The analysis included 640 publications by 1,247 authors from the Scopus international research database. According to the study, the most significant researcher is Andrei Yakovlev from Harvard University, with Michael
Essig from the Bundeswehr University in Munich in second and Helen Walker from Cardiff University in third.
Professor, Researcher, Co-chair
Tátrai is 10th on the list and the second most influential female researcher in the field. She has been a professor and researcher at Corvinus University since 1997. Tátrai is currently a professor at the Department of Supply Chain Management of the Institute of Operations and Decision Sciences, co-chair of the professorial board, a public procurement expert of the European Commission’s Electronic Public Procurement Working Group, and a member of the Public Procurement Authority of Hungary since 2019.
Tünde Tátrai of Corvinus University. The article also names the most significant organizations in the “institutional cooperation network for public procurement research,” including Corvinus University of Budapest, which is involved in both EU Horizon and Hungarian OTKA projects in this research area. Research into public procurement is influential as the field accounts for around 12% of a developed country’s GDP and can cover up to 70% of government spending, according to recent figures
Corvinus University of Budapest bills itself as Hungary’s leading economics and social sciences university. Its medium-term goal is to become Central Europe’s best higher education institution in these fields. Corvinus University says it has almost 10,000 scholars, including 2,000 international students. It has close links with 200 partner universities worldwide. It is regularly ranked high in global higher education rankings, with its Masters in Business and Management ranked first in the region by Eduniversal in 2019. Its Masters in Leadership and Organization course has seen it listed among the top 100 business schools in the world by the Financial Times. Corvinus says it is the only university in Hungary with two international institutional accreditations: the U.K.-based Association of MBAs and the U.S.based Association to Advance Collegiate Schools of Business, also known as AACSB International.
PRESENTED CONTENT
Largest Pharmaceutical Wholesaler Gets Fresh Expert Management Hungaropharma Gyógyszerkereskedelmi Zrt. turns 75 in 2024, and Judit Füzesi, a member of the senior management since 2011, took over as CEO on Jan. 1, 2024. The Budapest Business Journal discussed the present and the future of Hungary’s market leader pharmaceutical wholesaler. BBJ STAFF
BBJ: Hungaropharma Zrt. is among the top 50 companies in Hungary regarding revenue, but it is relatively unfamiliar to the average reader. Judit Füzesi: Yes, that’s right. As the most significant national pharmaceutical wholesaler, Hungaropharma works outside the limelight of healthcare, but thanks to its expertise, it provides every second box of medicine to the Hungarian population. The successful strategy of the past decade allowed the establishment of a unique vertical pharmaceutical market integration encompassing nine subsidiaries, which are critical players in their fields, along with the parent company. Hungaropharma Group has increased its capacities significantly
the last eight years as managing director of Bellis Egészségtár Kft., one of the group’s strategic subsidiaries. Andor Nagy, director of group operations, has actively contributed to Hungaropharma’s stable and successful operation. He will take on the chief logistics and technology officer role in the new management. They will be joined by Dr. Balázs Felsmann as chief financial officer from Feb. 1, 2024. He is currently a university faculty member with extensive experience in the financial management of pharmaceutical enterprises.
BBJ: What goals have you set for yourself and your fellow managers? JF: I will continue to work as a CEO to make Hungaropharma Group a pillar of the industry as a market-leading From left: Andor Nagy, László Dene, Judit Füzesi, Dr. Balázs Felsmann. pharmaceutical wholesaler, a comprehensive service provider of pharmaceutical logistics, and a leading pharmaceutical over the past few years and has created became one of the most important strategic market innovator. I firmly believe that the Hungaropharma Group is an essential actor one of the region’s most significant companies with a rich history of tradition. in the long-term, uninterrupted professional pharmaceutical logistics centers. The We move on with a new top management and business development of the Hungarian average reader will actually meet us quite and strategy in January 2024, but our pharmaceutical trade and an important often; our hundreds of transport vehicles position in the industry and our ambition contributor to its future. The combination travel thousands of kilometers every day for success will remain the same. of our pharmaceutical experience, our to take the proper medication to the right The latter is based on deliberate and unrivaled logistical capacities in the region, place on time. When they see a vehicle with forward-thinking decisions; therefore, my and our strategy, aligned with international the slogan “We deliver healing,” that’s us. primary consideration while selecting the trends, contribute to the smooth operation, new members of the top management was security and development of the Hungarian BBJ: The new management means their experience in the pharmaceutical a significant change for the company. industry. I am ready to apply my more than pharmaceutical trade and market. While respecting the values of the What is the reasoning behind this, and 30 years of experience, in addition to the past, we will do our utmost to use our what are your plans for the future? extensive and detailed knowledge of my achievements and experience to help the JF: Former CEO Dr. Antal Feller and deputy three fellow directors, and not only take group perform even better. I simply told my CEO and chief financial officer László Sz. Kis over the management of Hungaropharma colleagues that our goal is to achieve even retired on Dec. 31, 2023, after successful Group but also successfully contribute better results through intelligent, cooperative and illustrious careers. The three of us were to its development. I will work with three work and possibly by implementing the senior management team for 12 years. deputy CEOs. The new chief business innovative changes and new tools. During this period, Hungaropharma officer will be László Dene, who spent
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Budapest Business Journal | January 12 – January 25, 2024
Company Liberty Dunaújváros Restarts Rolling Mills Liberty Dunaújváros, Hungary’s biggest steel maker, has restarted its rolling mills, including its hot dip galvanized line, Liberty Steel Group, which acquired the business in October 2023, said on Jan. 8, according to autopro.hu. Liberty said the mills will focus on an initial campaign for specific customers before ramping up further in Q2. The restart is the first stage of a 100-day program at Liberty Dunaújváros that will enable the company to operate more efficiently in preparation for the expected market upturn, parallel with an expansion of volume. The optimization program includes reducing unjustified operating costs, resulting in the use of fewer external services. During the restructuring process, Liberty Dunaújváros will retain its staff and pay salaries as normal. It expects to start retraining courses in the first half of this year to prepare employees for the operation of its proposed electric furnace.
News
Under an agreement signed last fall, Liberty Dunaújváros will get a 150-tonne capacity electric arc furnace from China’s Cisdi Engineering Company, reducing carbon emissions by around 80% and allowing for flexibility in charge materials.
Family Companies More Optimistic About Economy Hungarian family companies are more optimistic about the development of the economy. More expect an improvement than a decline in a one-year period. At the same time, they think there will be a smaller increase in sales revenue and a larger decrease in profit in their own management in 2024 than in Q4 2023, according to a K&H Index based on a survey of 81 family companies with an annual turnover of more than HUF 2 billion, writes profitline.hu. The index value for Q4 2023 was 0 points, a slight drop compared to the 3 points in Q3. The corporate sub-index
showing their own company’s prospects decreased from 8 points to 2 points, while the macro sub-index improved from -10 points to -4 points compared to the previous quarter, K&H said.
Yettel Mobile Internet Traffic up During Xmas Holidays Mobile internet traffic on Yettel’s network during the holiday period between Dec. 24 and Jan. 1 increased significantly (89%) this year compared to 2022, according to business daily Világgazdaság [Global Economy]. The service provider’s customers sent 8% more text messages on New Year’s Eve than at the same time last year. Customers made the most voice calls on Dec. 24, but the longest phone conversations took place on Dec. 25. The average length of Christmas calls increased by 5% compared to the previous year.
Bank of Hungary (MNB) on its website on Jan. 5. The corporate lending stock, including subscriptions to corporate bonds, stood at HUF 13.587 trillion at the end of the month. Companies made net deposits of HUF 116 bln in their accounts at Hungarian banks during the month, lifting the corporate deposit stock to HUF 15.432 tln. The average interest rate on forint business loans stood at 13% in November, down from 13.09% in October and 15.41% in November 2022.
Delta Systems Signs Strategic Agreement With Evosoft
Companies Borrow HUF 199 bln in November Non-financial companies borrowed a net of HUF 199 billion from local lenders in November, according to monthly data released by the National
BBJ Graphic based on image by helloRuby / Shutterstock.com
Chinese, German Capital Attract Each Other in Hungary
Delta Technologies said its IT subsidiary Delta Systems has signed a strategic agreement with industrial software developer Evosoft Hungary in an announcement on the Budapest Stock Exchange website on Jan. 4. Mutual support as a result of the agreement will allow both companies to implement IT developments with higher valueadded, boosting their competitive advantage on domestic and foreign markets, Delta Technologies said. Delta Group is one of the largest system integrators in Hungary, with a staff of around 250. Evosoft Hungary, a strategic partner of Siemens Advanta, has a staff of more than 1,800.
Wallis Carsharing Service Numbers up 30% User numbers of Wigo, the carsharing service of Wallis Autómegosztó, rose almost 30% to more than 100,000 last year, the company said in a release on the website of the Budapest Stock Exchange on Jan. 8. Wigo users rode 8 million km in 2023, about the same distance as in 2022. The average trip was 15 km, completed in an average of 52 minutes. The Wigo fleet is around 500 vehicles with an average age of just over a year. Mark Koralewsky, who heads the carsharing service, said a single Wigo auto could replace 7-10 individually owned vehicles in the capital, cutting back on traffic and pollution and reducing the parking problem. He added that the firm’s 100 km radius is being expanded to include satellite settlements.
Masterplast Expects EUR 11.5 mln Loss
Chinese and German capital attract each other in Hungary, which now has the most complex automotive industry ecosystem after Germany, Minister of National Economy Márton Nagy said in an interview published in the latest issue of Demokrata. “The tendency is that German and Chinese capital want to work
together, and this has become Hungary’s turf,” Nagy told the publication. “Chinese capital arrives in Hungary because of German capital. Battery plants don’t come here for the pretty landscape but because the BMW plant is 200 meters from the Catl factory,” he added,
referring to the Chinese battery maker’s base under construction in Debrecen (225 km east of Budapest). “That Chinese capital then draws more German capital, and the additional German capital brings more Chinese capital. These are mutually reinforcing processes,” Nagy added.
Listed building materials manufacturer Masterplast said it expected to book a loss of around EUR 11.5 million for the full year in an announcement posted on the website of the Budapest Stock Exchange. The company had earlier forecasted a full-year after-tax profit of EUR 1 million, acknowledging a decline in market demand but focusing on cost cuts and optimizing production capacities. Masterplast said revenue was likely to reach EUR 144.7 mln, under the earlier projection for EUR 175 mln. The firm expects a negative EBITDA of EUR 2.5 mln.
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Budapest Business Journal | January 12 – January 25, 2024
WHO’S NEWS Do you know someone on the move? Send information to news@bbj.hu
Szecskay Attorneys at Law Names Baldwin Partner Szecskay Attorneys at Law has announced that Sam MacMahon Baldwin was promoted to the firm’s partnership, effective Jan. 1, 2024. Baldwin is a seasoned EU and competition law practitioner with extensive expertise advising businesses on all EU and antitrust matters. He acts for a broad range of clients, including in the pharmaceuticals, telecoms, and financial services industries. In addition, the European Commission has selected him to serve as a non-governmental advisor to its Directorate-General for Competition. The law firm expects Baldwin to drive growth further in its EU competition law practice in close cooperation with team head Anikó Keller. In particular, he will lead the firm’s cross-border antitrust, merger control, state aid, and EU internal market mandates. “Sam Baldwin is an internationally recognized antitrust expert and a highly regarded member of our firm,” says András Szecskay, founder and name managing partner at Szecskay Attorneys at Law. “With his business-oriented yet very human approach to clients and their business, he can present very complex competition law issues with great clarity.
Krausz Seeking Opportunities to Expand Abroad Krausz High-tech Stone Kft., which manufactures unique concrete elements and develops many innovative products, is opening up to industrial customers as well as the private sector and is looking for expansion opportunities in CEE regional markets, according to Péter Krausz, the founder-co-owner and managing director of the company, writes profitline.hu. He reported that the firm is looking to cooperate with foreign companies, both for the sale of colorretaining hybrid technology and green concrete products.
Capital Raise Registered at Merkantil Bank OTP Bank has announced the registration of a capital raise at group member Merkantil Bank, according to business daily Világgazdaság [Global Economy]. OTP said it has raised the registered capital at the leasing unit from HUF 2 billion to HUF 3 bln.
MOL Increasing Excise Tax Gradually Hungarian oil and gas company MOL will build a HUF 41/liter vehicle fuel excise tax increase into its gasoline and diesel prices in two
And to professional counterparties, he delivers true professional excellence. I’m very proud to have him on board; his dedication and international experience are invaluable for our team and clients,” Szecskay adds.
Federspiel, where he was called to the Bar as Advokat in 2013. Baldwin moved to Hungary in 2017 and joined Szecskay. He qualified as a fully-fledged Hungarian attorney in 2022.
on the precise understanding of the aims of the clients to elaborate appropriate and tailor-made legal solutions,” says Gergely Légrádi, partner and co-head of the practice.
Oppenheim Announces Partner Promotion
Oppenheim has announced that Dávid Hanis was promoted to partner at the firm, effective Jan. 1, 2024. He joined the firm in 2009 as a junior associate after graduating from university and has progressed steadily since then. Since Jan. 1, 2022, Hanis has acted as the co-head of Oppenheim’s regulated industries practice group. He is one of the co-authors of the book, “The Operation and Regulation of the Hungarian Natural Gas Sector II.” His area of specialization is energy law, comprising electricity and natural gas trading, renewables, energy efficiency, and mining. He also has considerable expertise and experience in other regulated industries, such as waste management, environmental protection, the automotive sector, e-mobility, and pharmaceuticals. His clients are mainly companies active in the energy market, such as electricity and natural gas traders, Sam MacMahon Baldwin renewable energy source producers, mining entrepreneurs, technologyintensive investors, energy consultants, and market players of other Baldwin grew up in Denmark with regulated sectors. British family roots and obtained his law “Dávid has an in-depth knowledge degree from Copenhagen University in of the sector of regulated industries, 2010. He practiced law for eight years at putting a special emphasis the Danish top-tier law firm Gorrissen
steps this month, retail director András Orosz told state news agency MTI on Dec. 29, 2023. MOL phased the first HUF 20 of the increase into prices from Jan. 1 and will integrate the remaining HUF 21 from Monday, Jan. 15. Hungary’s parliament earlier approved the excise tax increase effective Jan. 1 as part of the transposition of European Union rules into national law.
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Dávid Hanis “Dávid’s appointment as partner is part of Oppenheim’s strategy of elevating the next generation of lawyers who are the future of the firm. He is also a perfect example of the career path at Oppenheim with his commitment of the last 14 years,” said István Szatmáry, managing partner of Oppenheim.
1st Lynx Rolls off Assembly Line in Zalaegerszeg
Spar Raises Wages 10-24%
Spar Hungary has raised employees’ base pay between 10% and 24%, on average, from Jan. 1, based on an agreement with trade union KASz, the supermarket chain said in a statement released on Jan. 2. Spar Hungary will spend HUF 17 billion on pay rises this year. Around 14,000 people are on the company payroll.
Aldi Raising Wages by 12%
Aldi Hungary raised staff pay by 12% across the board from Jan. 1, the German-owned discount chain said in a press release on Jan. 2. The pay rise is Aldi Hungary’s fourth in two years, the company said, adding that staff now earned at least 38% more. The retailer noted that 30% of its staff had been with the company for more than five years. Aldi Hungary has around 6,000 people on its payroll.
The first KF41 Lynx infantry fighting vehicle to be built in Hungary has rolled off Rheinmetall's assembly line in Zalaegerszeg (215 km southwest of Budapest), the German defense industry company said in a press release on Dec. 21. After performance and quality inspections, the vehicle will be handed over to the Hungarian Armed Forces. Rheinmetall opened the plant in Zalaegerszeg in August. Rheinmetall was awarded
a contract worth more than EUR 2 billion to supply Hungary with 209 KF41 Lynx vehicles in seven variants and complementary products and services in September 2020. Hungary is taking delivery of 46 Lynx vehicles from Germany, the first of which was transferred from Germany in October 2022. The remainder will be produced locally by Rheinmetall Hungary, a joint venture owned by Rheinmetall (51%) and the state of Hungary (49%).
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Budapest Business Journal | January 12 – January 25, 2024
Special Report The Year Ahead
Economic experts highlight the changes they expectin Hungary’s economy for the upcoming year, discussing GDP, inflation, foreseeable changes in national legislation and the development of relations between Hungary and the European Union. LUCA ALBERT
“I think that 2024 will perhaps be a little more lively than 2023, but I do not expect a significant acceleration since we are experiencing a slowdown in the whole of Europe, and business confidence is not very high either,” shares Tamás Lőcsei, CEO of PwC Hungary, in discussing the tendency of mergers and acquisitions for the 2024 year. As for Hungarian GDP, inflation rates and EU/HUF exchange rates, Lőcsei expects that “Hungarian GDP will be
between
3-4%,
inflation may be around 5-6%, and the exchange rate of the euro will not exceed HUF 400 on average.” Károly Radnai, CEO of Andersen, identifies one crucial factor that emerged late last year as central to Hungary’s GDP in 2024. “Thanks to the agreement reached with the European Commission at the end of 2023, a couple of longpostponed and extremely important EU co-financed programs can
Image by Graphic and Photo Stocker / Shutterstock.com
The Economic Crystal Ball: Expectations and Challenges for Hungary in 2024
finally start, and this will surely have a positive effect on GDP as well,” he says. “[Some challenges are] a budget deficit [the scale of] which hasn’t been seen for decades, still extremely high inflation and, at the same time, very high interest rates, all of which act against investments. [...] There are not many options; either taxes must be raised, or expenses must be reduced because, at the moment, it is not clear what would cause GDP to jump,” Radnai adds.
EU Relations
Relations between Hungary and the European Union will be a focal point this year, even more so than usual, given that Hungary will hold the rotating Presidency of the Council of the European Union for six months starting July 1. “Perhaps the European Union elections [due between June 6 and 9] can bring substantial improvement in the relationship between Hungary and the EU,” Lőcsei suggests. “The Hungarian presidency will be a very important semester. I expect progress on matters important to Hungary, such as the accession of Romania and Bulgaria to the Schengen Zone, migration, competitiveness, family policy, energy policy, and enlargement and cohesion policy,” he says. “The relationship between Hungary and the European Union is complicated, but in my opinion, Hungary will receive significant additional resources during the 2024 process and
in the following years as well,” Lőcsei continues, specifically mentioning the
EUR 780 million advance
as part of the Recovery and Resilience Facility (RRF) REPower EU loan package, as well as the EUR 445 mln transferred to Hungary on Jan. 2 as part of the Cohesion Fund.
Taxes and Legislation
Another extensively discussed area of upcoming changes in Hungary is speculation of new legislation and tax changes that could affect domestic businesses, with a spotlight on the introduction of the global minimum tax to Hungary, as well as the launching of the e-VAT system. “As part of the digitization efforts of the tax authority, the e-VAT system launched in 2024 will be the first important milestone [...], but we must not forget that the EU’s initiative called “VAT in the digital age” is still subject to negotiation between the member states, highlights Gábor Farkas, a tax partner at PwC. “If the EU proposal package is accepted, it could drastically change the electronic invoicing system of both Hungary and other member states,” he warns. Farkas also expanded on the introduction of global minimum tax regulations in Hungary. “Although [the rules] entered into force in Hungary on Jan. 1, many ministerial decrees containing the detailed rules have not yet been announced, and additional interpretation aspects developed by the OECD may still be published in 2024.”
Radnai agrees. “The impact of the global minimum tax will only be felt
from
2025,
from which the state hopes to generate additional income of HUF 90 billion100 bln, so the only significant change compared to previous tax levels will be the increase in excise taxes, which went into effect on Jan. 1,” he notes. “It would be preferred that the sectoral special taxes be continuously reduced and that no new types of taxes be created,” Radnai adds. “These are extremely damaging to the credibility of Hungary and trust in the legislation among both foreign and domestic investors,” he explains. Another development for the upcoming year will be the expected change in corporate sustainability reporting in accordance with the Corporate Sustainability Reporting Directive adopted by the European Union in November 2022. According to an analysis made by Schneider Electric, companies employing more than 500 workers must begin collecting and analyzing data about sustainability risks and opportunities, as well as its impact on people and the environment, with the first mandatory reports due in 2025. The CSRD initiative will not, however, affect those companies covered by the Non-Financial Reporting Directive, whose first reports are due in 2026. The NFRD requires public disclosure documents such as annual reports, sustainability reports, and integrated reports to include environmental matters, social and employee aspects, respect for human rights, anti-corruption and bribery issues, and diversity among the board of directors.
Growth Sectors
In terms of likely growth sectors, the experts the Budapest Business Journal spoke with mentioned an array of industries with economic potential. “Industry 4.0 has not yet been incorporated into the Hungarian economy, although we started preparations early with the Irinyi Plan,” mentions Lőcsei. He»expresses optimism about the agricultural and food processing, retail, business services and tourism sectors. Radnai sees potential in “Energy investments, primarily investments in developing electricity networks.” Lőcsei had one final thought. “It is important to further and continuously strengthen our education and research and development activities, even if we have to change many stakeholders who stick to traditional methods in one way or another.” Editor’s note: We also invited Deloitte, EY, and KPMG to contribute to this article, but they either declined to do so or did not get back to us before our deadline.
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Budapest Business Journal | January 12 – January 25, 2024
The Budapest Business Journal Wish List 2024
Trust, Investing in Children, Picking Mushroom and a Diplomatic Cry for Better Communication With Youths For the seventh consecutive year, Kester Eddy rounds up a gathering of the great and the good, including voices that tend to get less coverage in a business publication like ours, to discover their wishes for 2024. For Goodness Sake, Let’s be More Positive!
Alice Ruggen I’ve been living in Budapest for almost five years, having moved here from Italy after graduating from high school. I speak Hungarian
Alice Ruggen and Italian at native level, and I know the culture, customs, ways of thinking and habits of both countries. One thing I have noticed in Hungary makes me wonder a lot: the pessimism of people.
Whenever I tell someone I moved from Italy, they invariably ask me, “Are you crazy?” “I’m jealous,” or “I would never move; what a dream to live in Italy.” When I hear these words, it always makes me think: I want people to understand that there are problems everywhere, in every country, and that it is completely different to see a place as a “tourist” than to live there. I hope that in the new year, there will be more positivity in people because I think that is what defines our days. If we were more focused on what’s going well here and what’s good, we wouldn’t be so busy constantly seeing what’s bad. This negativity brings more pessimism. Of course, there are problems: we have to be realistic, but to focus on them and talk about them is to lock ourselves in a bubble. I have taken to many Hungarian cultural traditions, such as the Easter Monday locsolás, when boys set off in the morning to “water” their lady friends. I look at this city with admiration, and I feel so grateful to have built my life here. Ruggen grew up in Bologna, Italy, with a Hungarian mother and an Italian father. She moved to Budapest aged 19 and now works as the shop manager for Simon Skottowe Bespoke Tailors.
This One Feels Different
Patrick Chilton With every new invention, from the printing press to television, some will say it’s the destroyer of civilization. But this one feels different. The internet has, over the decades, turned from a disorganized, nerdy hangout place to a race for the constant attention of absolutely everyone. Television might have been addictive, but most people could not consume it all day, and powerful corporations and nation states weren’t investing billions of dollars to manipulate people on an individual, personalized level. I’m a software engineer myself and the techno-optimism I once had has turned into an existential dread that we’re building something that’s out of our control, either due to economics and game theory (“if I don’t build the manipulative, addictive product, my competitor will”), or, even scarier, an intelligence that’s beyond our comprehension. This might sound like science fiction, but the last few years of advancement in machine learning have had results that no one even thought would happen for centuries. And suddenly, all bets are off.
Patrick Chilton A drought in funding has also led many unprofitable companies to degrade their products and exploit their users, which is also a disappointing result for the online economy. All in all, I wish that, in 2024, we can have a long, hard look at ourselves, what technology has become, and where it’s taking us. Chilton, who grew up in Pest County, now lives in Budapest and is co-founder of Benaco, a 3D scanning startup.
Special Report | 13 of future generations. The situation in Hungary varies due to regional and economic disparities. Despite the existence of professionally recognized institutions and programs, access is not uniform across the country. Shortages in resources, a lack of professionals, and insufficient information can be challenges in early development. Hence, continuous support and the expansion of facilities are necessary to make appropriate developmental opportunities accessible to every child. Therefore, my wishes for 2024 include ensuring universal access to early development. The primary focus should be on expanding free, early intervention programs and services so that every child can benefit from this support and every family can easily access such services. But equally, parental education is important. We would like to launch new educational programs for parents through our foundation, enabling them to acquire the necessary tools and methods to understand, nurture, and develop their children’s developmental characteristics. The goal is for parents to feel that they are not alone in their challenges and to become competent parents. My third wish involves incorporating technological developments for innovation in the early development process. Digital technologies allow parents and professionals to monitor and support children’s development more effectively. This could include tools and applications that assist in tracking developmental milestones, as well as online platforms where parents can access information and support.
Devoting More to Child Development Essential For Long-Term Societal Health
Anita Madács As a special education teacher engaged in early development, numerous aspirations for 2024 have formed within me: all aim at optimal»development and equal opportunities for children. Early development is of paramount importance, as this period holds a child’s greatest developmental potential. The foundational aspects of the motor, cognitive, social, and emotional abilities of children are fundamentally shaped during the early years. Proper development during this phase facilitates movement and speech development, emotional regulation, the formation of social skills, and the establishment of lifelong learning abilities. Focusing on early development promotes, in the long term, social equality and the successful development
Anita Madács The combined realization of these wishes would contribute to making 2024 a year of further advancements in early development, creating optimal conditions for a balanced, successful, and happy life for as many children as possible. And it would make me very content. Madács is the professional leader for children with diverging development at Budapest’s BHRG child development center. Continued on page 14 ›››
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The Budapest Business Journal Wish List 2024 Continued from page 13 ›››
Let’s Start Rebuilding Trust on Local and Global Levels
John Cantwell I’m sure you’ve noticed the palpable decline in trust levels around the world. Partisan divides have been growing, making communication between people more difficult. Faith in our leaders and institutions is ebbing. Silos, divisive narratives and disinformation feed the flames. Open, honest and respectful dialogue seem relics of the past. This matters since even basic economic activities, not to mention politics and international relations, can become impossible when trust breaks down. The potential fall-out is not pleasant to imagine. It takes a lot to develop and nurture trust: Empathy, trying to see things from others’ perspectives; taking accountability for our own actions; better communication; as well as strong institutions to ensure justice and fairness. Inclusivity is crucial, as it is essential that everyone has a stake in the game. Furthermore, the need for high-quality leadership cannot be underestimated within communities and at the summits of power because there are always some individuals who influence other people’s thinking and behavior.
John Cantwell Perhaps least appreciated by many today is long-term thinking. It is generally over time that benefits become manifest, if we take the right steps now. With all of the challenges facing the world at this time, the stakes are incredibly high; trust is more important than ever. Is it possible
Kata Fazekas. Photo by Tamás Szekeres we can look past our differences, commit to building trust and pull together to make things better? American Cantwell is a long-term Budapest resident and is co-founder and managing director of Dramatrix, a corporate training company based in the capital.
Give More Love, Cook, Cycle, Pick Mushrooms and see World Peace
Kata Fazekas I don’t plan very much in advance; I like spontaneity. This question is a challenge for me. What do I want in 2024? To continue what I’ve been doing, but more consciously, with more attention, to find its value and to enrich my life. I love my job because there is always something unique and different happening alongside the daily routine. Pre-school children are cute, kind, impatient and quirky but lovable characters. I want to practice this giving of love, attention and understanding, to bring it to life in myself to give them what they need. These are the energies needed in the family, too, with some subtlety. I love to cook and the curiosity that comes from preparing new foods. I’d like to keep that. It’s especially wonderful to share it with friends. I have old friends and acquaintances, but I look forward to new ones with an open heart and interest. I enjoy hiking in nature, exploring towns and villages, and trying to notice the beauty around me. It brings joy and happiness to our days. And cycling, singing, painting, a good conversation, watching a movie, and mushroom picking. But also cleaning, washing, gardening, digging, hoeing. It all pays off! Thank heavens for that! I want that and World Peace! Fazekas is a nursery school assistant in Zsámbék, 30 kilometers west of Budapest.
We Must Connect Better to new Generations
Jose Angel Lopez Jorrin Your offer to contribute to your wish list has sunk me into an unexpected process of introspection. Indeed, what to wish for in 2024 while avoiding the usual New Year’s topics and direct political reference to the current developments in Hungary, Spain or even the world? I retired almost six years ago. My last message from Budapest to my Foreign Affairs Ministry began: “After 42 years, 3 months and 27 days of diplomatic career, I step down today into retirement” and finished with “I would start all over again.” Today, I am not sure I would be able to write that last sentence. Looking back, the world and the diplomatic career have changed so much since I so joyfully entered them. Today, I enjoy a pleasant and comfortable life. I read, walk, travel, entertain friends, but I also suffer when I look around to see a world and a reality which are becoming more difficult for me to understand, and to bear. I am growing increasingly intolerant (which I don’t think I have ever been previously), but the fact is that it is becoming more difficult for me to accept how young generations, totally abducted by their cell phones and social networks, ignore the most basic rules of social behavior and respect. I see them growing increasingly ignorant of a not-so-distant, bloody past and history and live in some sort of wishful thinking as a means to tackle the acute problems that we face with education, the environment, democracy, migrant movements, increasing inequalities, social honesty, demography […], you name them. Meanwhile, the present ruling political class is devoid of clearly enlightened, honest leaders; rather, it is stuffed with politicians who can only look into the short term to secure re-election by indulging in populism.
This, in turn, is increasingly leading our people into more chauvinism, xenophobia, nationalism and tribalism. These are just a few of the thoughts that come to mind when I search for a wish for 2024 that could be at the same time meaningful, optimistic and away from the hackneyed topics of these days. 2024 will be yet another challenging year for all of us. It is not a mere commonplace that our world is changing at an increasingly faster speed, and our societies are encountering everincreasing difficulties to cope with and adjust to the challenges we encounter and the transformations that are required. In this changing world, in which communication between new and older generations is increasingly difficult, and technological advances and developments are deepening the inequality gap in our societies, our attitudes are rather often leading too many people to growing intolerance and greater fears against each other. As I am experiencing myself, at the age of 76, this growing intolerance towards so many modern developments and suffering from ever more difficult communication
Jose Angel Lopez Jorrin with the younger generations that will have to face the difficult world we are delivering, my most fervent wish for 2024 and beyond is to become more tolerant, to feel more empathy to the new generations and to work harder not only to understand them but to transmit to them the valuable lessons that we have had to learn in our lives. Jorrin, born and raised in Madrid, was the Ambassador of Spain to Hungary from 2014-18. His diplomatic career included ambassadorial roles in Bosnia & Herzegovina, Bulgaria and Slovakia.
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Real Estate Market Actors Look to Upturn for 2024 It remains an open question when investment activity in Hungary and the CEE region will pick up after a subdued period due to concerns over the cost of finance, and the uncertain economic and geo-political environment, says real estate editor Gary J. Morrell. Another worry is how long yield corrections will continue. Academia is a Well pre-certified renovation project by ConvergenCE and Europa Property. Despite concerns over the cost of construction and debt finance and also around demand, healthy pipelines remain in the industrial, hotel and office sectors. All projects must be of a standard to meet changing tenant, customer, staff and guest expectations regarding the quality and design of space and increasingly strict and allembracing sustainability requirements. “I don’t expect much noise on the investment market in 2024, but we also know that there is money to be spent, so I am certain we will see some interesting deals,” comments Valter Kalaus, managing principal at Newmark VLK Hungary. “I expect 2024 to be a difficult but interesting year. I don’t anticipate many new projects, but I do expect some interesting resurrections of old ones and re-births of some forgotten ones. Both the office and industrial segments might show good signs so that we might see some noteworthy transactions. Tenants who are in the position to make a move can most certainly get some outstanding deals,” Kalaus adds. Yields have softened in every asset class. Further softening is subject to market sentiment, according to iQ Partners Hungary. As of Q3 of 2023, yields for Hungary were put at 6.5% for office, 6.75% for industrial
and
7%
for shopping centers. Budapest office yields had shifted by 75-100 basis points, a common trend across the Central European capitals. Rita Tuza, director of capital markets at iQ Partners Hungary, sees an upturn in the Hungarian investment market
in the second half of the year with less strict financial conditions from lenders, more certainty regarding pricing and yields, and buyers not waiting for further yield compression. In general, around 70% of transactions are being undertaken by Hungarian investors.
Office Pipeline
IQ Partners have traced a 287,000 sqm pipeline of office space for 20232026. Of this, 96,000 sqm has already been completed and occupied, and 192,000 sqm is available. Planned developments with a minimum of 24 months of construction time stand at 562,000 sqm. Concerning tenant expectations, the hybrid model has become a permanent element of the future of work. The consultancy expects a
14-15% vacancy
rate by 2025. “With regard to [the] office [sector], according to our expectations, demand for prime locations and modern, green, energy-efficient, and ESG-compliant office buildings will remain stable, leading to higher vacancy rates in older spaces,” Colliers says. “Additionally, there is a greater emphasis on employee needs in today’s business environment, prompting more companies to choose central, easily accessible locations with a wider range of services, rather than the outskirts or suburban areas,” the agency comments. “Overall, the office market will continue to be tenant-driven in 2024, with flexibility in contracts remaining of fundamental importance. We do not anticipate a significant turnaround in
vacancy rates, particularly in lowergrade properties and locations outside the central submarkets,” Colliers adds. The cost-to-value ratio of available tourist and hospitality services in Hungary is exceptionally competitive compared to other popular destinations around Europe, according to Wing, currently a prolific hotel developer. By 2024, passenger traffic at Budapest Ferenc Liszt International Airport is foreseen to reach the 16.5 million record set in 2019.
“I don’t expect much noise on the investment market in 2024, but we also know that there is money to be spent, so I am certain we will see some interesting deals. I expect 2024 to be a difficult but interesting year. I don’t anticipate many new projects but some interesting resurrection of old ones and re-birth of some forgotten ones.”
Diversification Strategy
“We have launched several new hotel projects and continued to implement ongoing ones. Diversifying our accommodation projects is also an integral part of our strategy in terms of location and brands,” says Ernő Takács, deputy CEO for hotels and retail at Wing.
“We started hotel construction projects on airport property, with the new Ibis Styles Budapest Airport Hotel, which opened in 2018. This will be joined [alongside] by a four-star Tribe hotel, which is also a Wing development,” He argues that building with environmentally conscious and sustainable perspectives in mind makes for more accessible project financing, and as in the office sector, this could play a part in the decisions that hotel investors make. “What’s more, modern hotels built and operated in this way are an increasingly important factor for hotel visitors. This gives a competitive advantage to developers making these hotels over other buildings that are considered obsolete in this regard,” Takács says. Benjamin Perez Ellischewitz, principal at Avison Young Hungary, believes renovations of older buildings will play a vital role in how the market develops in 2024 and beyond. “A significant amount of work will come in the coming years to upgrade the existing stock of assets in line with new standards and reduce the carbon footprint of the real estate activity. The future will be more and more about brownfield development and repurposing existing structures,” he comments.
Increasing Resiliency
In 2024, businesses will be looking for solutions that make the company and their communities more resilient so that no matter what challenges are faced, society is better prepared and can bounce back faster. Leading brands increasingly use Well to drive ESG performance and reporting. Continued on page 16 ›››
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“The most sought-after asset classes are expected to include industrial and logistics properties, certain smaller retail assets, strip malls, as well as core office spaces. In the retail sector, investors are likely to focus on strip malls and high street assets with long-term agreements,” the consultancy says. “The increasing importance of fulfilling ESG criteria is evident, even for investors who may not have prioritized this aspect previously, and this will likely be reflected in pricing. In the CEE region, unconventional sectors such as healthcare and data centers are gaining popularity. In Hungary, there is also an expectation that alternative investments will receive more attention in the upcoming period,” Colliers adds.
Continued from page 15 ››› For example, pharmaceutical company MSD (Merck in the United States and Canada) has 44 offices enrolled in the scheme worldwide, with six already Well Certified. The MSD Budapest office (in the Millennium Gardens building at Lechner Ödön Fasor 10/b in District IX) is Well pre-certified and expected to become a fully certified space in 2024, according to Regina Kurucz, architect and Well assessor. “I also expect the rise of inclusive spaces
in
2024
in Budapest. There is much interest in certified programs like Access4you and the Well Equity Rating. Inclusive spaces are a better environment for all, for example, people with strollers, people with reduced mobility, the elderly or people with neuron diversity. So inclusive spaces provide a competitive advantage,” she adds. Zsombor Barta, an ambassador for and former president of the Hungarian Green Business Council, agrees with Perez Ellischewitz that the renewal of existing assets and portfolios will become the new and leading issue, as ESG and EU Taxonomy requirements are pushing these stakeholders into energy efficiency investments and retrofits. “I think we have to add to our sustainability certification vocabulary one or two more certifications or verifications; the EU Taxonomy verification is something more and more requested by financial institutions or investors, as this is about sustainable business activities and this is needed
“There is a growing focus on green warehouses, driven by increasing investor and tenant demand for longterm sustainable operations and energy-efficient functions. Developments are supported by the expected strengthening of the EUR/HUF exchange Liberty, a hotel and office project developed by Wing. rate and a slow in the growth rate of construction Hubert Abt, CEO of New Work if beneficial financial or investment costs that was prevalent Offices and Workcloud24, argues conditions are applied to a project that ESG compliance will become or portfolio,” Barta explains. in previous years.”
Gaining Significance
Given that ESG is a hot topic, certifications that support the “S” (social) element of ESG screening and data provision, such as Access4You, a system that certifies the overall accessibility of the built environment, will also gain significance. “In the end, we need more [thirdparty] verified data for ESG or other sustainability reports because credibility and transparency are an extremely important part of these new reporting schemes or investment requirements,” Barta believes. According to CBRE figures,
81%
of surveyed
investors will adopt ESG criteria in all investment decisions despite macroeconomic headwinds and a challenging geo-political landscape.
The Hungarian property scene has welcomed a new development company established by three experienced real estate market players at the end of 2023. Realis Development is part of Realis Group, a holding company that has been active since 2013. The development company was established to create premium quality property products in Hungary and CEE that generate financial value
the buzzword of 2024. “With more education and pressure from banks, tenants and investors, landlords will realize the need to comply with the EU Taxonomy, and that spending on ESG compliance is [….] a highly profitable investment,” Abt says.
Demand for industrial and logistics properties is expected to remain more robust than for other types of real estate, but increasing vacancy is anticipated due to expected significant new deliveries. “There is a growing focus on green warehouses, driven by increasing investor and tenant demand for longterm sustainable operations and energyefficient functions. Developments are supported by the expected strengthening of the EUR/HUF exchange rate and a slow in the growth rate of construction costs that was prevalent in previous years,” comments Colliers.
Noah Steinberg, chairman and CEO of Wing, sees much room for e-commerce to develop in Hungary but also for logistics providers to cover neighboring countries from Hungarian locations. The strong growth in manufacturing also supports the warehouse market as suppliers to these plants also need property to operate in. “We are not out of the woods yet. While we have now reached the end of the interest rate increase at the ECB level, major economies in Europe are by now in recession. Bottlenecks remain the lack of debt and the difficulty to price the risk in this period of uncertainty and deteriorating fundamentals. I expect a relatively quiet first semester of 2024 with activity picking up towards the end of [the year],” concludes Perez Ellischewitz of Avison Young Hungary.
but also contribute to the aesthetic, technical and sustainability standards of the built environment, according to the company. Realis Development’s portfolio has a line-up of modern and heritage projects in the hotel and residential segments, with longer-term plans including office developments. “Together with my business partners Tamás Ádány, CFO, and Zsolt Gyöngyösi, development
director, we have built an expert team equipped with all-around real estate competencies,” commented the founding partner and CEO Mihály Schrancz, who for many years headed up the multifunctional BudaPart neighborhood development in Újbuda, adjacent to the Danube and across the Lágymányosi Bay from the popular rest, recreational, and entertainment hub known as Kopaszi Dam.
Industrial Growth
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A Wander Down Budapest’s Broadway Somewhat to my embarrassment, I only discovered Nagymező utca was known as Budapest’s Broadway when I interviewed Florian K. Walther, general manager of the new Hard Rock Hotel located midway down the street. DAVID HOLZER
Sitting in the Mai Manó café just down from the junction of Nagymező utca and Andrássy út a week or so later with British journalist and writer Peterjon Cresswell, who has lived in Budapest for 30 years, gazing out at the Budapesti Operettszinhaz opposite, I wondered why I’d never made the connection. Mai Manó café is a cozy, slightly Moroccan-themed spot in the building that houses the Hungarian House of Photography. This is part museum, part contemporary photography gallery and well worth a visit. From 1931 to 1944, Mai Manó House was the site of the legendary Arizona nightclub. It was opened by a Hungarian couple returning from America, the artist and composer Sándor Rozsnyai and his wife, the dancer Mária Senger, known as “Miss Arizona.” She got her nickname from the Hungarian writer Dezső Szomory, also known as the Hungarian Proust, who was inspired by her flaming red hair and gentle eyes, which somehow reminded him of the desert. The Arizona’s heyday was the early period of WWII when Hungary was nonaligned, and the club was frequented by spies, diplomats and members of Budapest’s underworld. It met its end when Rozsynai, who was Jewish, was “disappeared” by the Gestapo in March 1944. After the Germans and the Arrow Cross were finished with the Arizona, the only thing that remained was a gold-framed mirror, still preserved at Mai Manó house. Today, Nagymező is home to the Microscope Stage, the Radnóti
After we’d pondered the footprints outside the Operetta, Cresswell giving me potted histories of some of their owners, none of whom I’d heard of, we strolled off down Nagymező, heading away from Andrássy. We stopped outside a bar called Edith at Nagymező 25. Here, Cresswell’s eyes misted over as he recalled the days when this was the site of the legendary Piaf bar. The Piaf, somewhat a descendant of the Arizona but on a more modest scale, was opened in 1990 by award-winning actor Béla Paudits and his wife, Mária. As Cresswell has written, “With its velvety curtains, faux bordello feel and, most of all, a speakeasy-style window cut into the front door, red-lit with neon outside, the Piaf effortlessly slid into urban myth. If you were in Budapest in the 1990s, you were at the Piaf.”
Theater Crowd
Paudits and his wife hoped to attract the theatrical crowd. No doubt they did. But the Piaf also became known as a haunt for expats searching for Budapest lowlife and its colorful demi-monde. They found it, especially in Piaf’s dark, alcove-pocked and smoky basement. Today, according to Cresswell, the fug of tobacco is recreated in a less lifethreatening way by a dry ice machine. The Piaf eventually closed in 2017. Cresswell suggests this might have been because District VI is “quite well-to-do. They clamped down on the partying, noise and late nights, which they didn’t do in District VII, so that became the party district.” While it may have led to the closure of the Piaf, this more restrictive attitude has probably preserved the character of District VI. As Cresswell says, “You get more of a sense of turnof-the-century Budapest.” Emblematic of this is the splendid Grünberger chandelier shop, sadly closed on the day of our stroll. Today, fourth-generation chandelier master Tamás Gábor Grünberger heads up a family business that has survived global economic collapses, wars, the 1956 Hungarian Uprising and communism and continues to thrive. The Edith opened in late 2020 and has offered music, movies and alternative events ever since. Sadly, or perhaps The statue of composer and conductor Imre Kálmán outside the main fortunately, depending on your point entrance to the Budapesti Operettszínház. Photo by Gabriella Kiss. of view, it no longer stays open as late as it did. “You could rock up at 2 a.m. and leave after the trams started running,” If you’d like to take in a performance at Cresswell says wistfully. Miklós, Thália, and Tivoli theaters, the Budapest Broadway, the Operatta, the As we walked back up towards the Budapesti Operettszínház and nearby Franz Liszt Academy of Music and the Andrássy end of the street, we the Moulin Rouge nightclub; most the Hungarian State Opera House a few passed the Hard Rock Hotel. I asked are concentrated on either side of minutes away on Andrássy utca are your Cresswell why he thought the Hard Andrássy utca. Directly opposite the best bet. There are two reasons for this. Rock and the W Hotel, which opened Mai Manó café is the Budapest Operetta The theaters in and around in the former Ballet Institute nearby, Theater, built by Viennese architects Nagymező only put on Hungarian have associated themselves with Fellner and Helmer in 1894. It became language plays. Also, as Cresswell the cultural aspect of Budapest. home to the operetta in 1923. explained, it’s extremely difficult to get “In terms of tourism, Budapest is Walk of Fame tickets to the theater in Hungary. booming again,” Cresswell said. “I’m Outside the main entrance to the “The theater in Hungary is surprisingly not a marketing person, but I guess the theater is a statue of the Hungarian popular and relatively affordable,” marketers at the Hard Rock and the W composer and conductor Imre Kálmán, Cresswell tells me. “It’s seen as a form are looking at what they can offer visitors regarded as the father of Hungarian of entertainment that one should enjoy to change the perception of Budapest as operetta. Over the years, stars of and support. A night at the theater is just another European capital. I imagine the Hungarian stage have pressed a reason to dress up and go out. This the way they want to sell the city is as their feet into and signed their names isn’t just true for Budapest. It’s the same a place of culture, a ‘vibrant’ urban city on tiles embedded into the pavement. in all decent-sized Hungarian cities.” with a fascinating history. Which is true.”
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in Brief
Renoir Exhibition Gets Extended Run
of the capital, has died aged 88, Finta Studio announced in a press release on Jan. 8. The architect, a winner of both the Ybl and Kossuth prizes winner, was a member of the Hungarian Academy of Sciences and the Hungarian Academy of Arts. Among the many buildings he designed in Budapest are the Westend City Center, the Kempinski Hotel Corvinus Budapest and the Budapest Police Headquarters.
Ministry Supporting 141 Cultural Festivals With HUF 800 mln
Screenshot of the Finta Studio website. The headline says simply, “Farewel...”
Architect József Finta Dies at 88 József Finta, an architect whose designs for public buildings such as the Marriott Hotel and the University of Public Service helped shape the profile
Preserving, presenting and strengthening the position, rank and quality of Hungarian culture has been identified as a priority task for the government. To this end, 141 cultural festivals have won support for their plans for 2024 from the National Cultural Fund (NKA), writes profitline.hu. The Ministry of Culture and Innovation announced in December that, given the demand for financial support, it had increased the amount of the tender announced by the College of Cultural Festivals of the NKA to HUF 800 million.
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Pierre-Auguste Renoir: “The Swing,” 1876 | © Paris, Musée d’Orsay, RF 2738 | Photo © RMN-Grand Palais (Musée d’Orsay) / Hervé Lewandowski Budapest’s Museum of Fine Art has extended its exhibition of works by Pierre-Auguste Renoir, the French painter instrumental in developing the Impressionist style, until Jan. 21. The doors to the show will open an hour earlier, at 9 a.m., at the weekend, and the exhibition can also be seen on Mondays when the museum is usually closed. Around 70 works from more than 20 public collections (including those of the
Apácz Scholarship Program Continues in 2024 The Apácz Scholarship Program, which aims to support disadvantaged but talented students, will continue its mission this year, the Ministry of Culture and Innovation told state news agency MTI on Jan. 5. The HUF 6.2 billion program not only provides financial incentives but also fosters talent among young people with the involvement of mentors, instilling optimism for a brighter future. The program supports disadvantaged students with good academic results for between seven and 19 months with up to HUF 34,000 per month.
Musée d’Orsay and the Musée de l’Orangerie in Paris, France) are on display at the exhibition entitled “Renoir: The Painter and His Models.” The exhibition, which opened in late September, had initially been due to close its doors on Jan. 7. On Dec. 20, 2023, the conservative daily newspaper Magyar Hírlap [Hungarian News] reported that the exhibition had already attracted nearly 200,000 visitors.
Ancient China Exhibit Draws 62,000 Visitors An exhibition showcasing treasures from ancient China drew close to 62,000 visitors to the Ferenc Móra Museum in Szeged (170 km southeast of Budapest), the institution said on Jan. 9. The first part of the exhibition, featuring soldiers of the Terracotta Army of Qin Shi Huang, the first emperor of China, opened on May 26. The second part, “Treasures of Ancient China: The Age of the Jade Emperors,” opened on June 24. It included objects from the Han dynasty on loan from several public collections in China. The exhibition finished on Jan. 7, although pieces of the Terracotta Army will remain on display as part of another exhibition that will open at the Ferenc Móra Museum later this month.
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Chamber of Commerce Corner
This regular section of the Budapest Business Journal features news and events from various international business chambers. For further information and to register for specific events, visit the organizing chamber’s website. If you have information for inclusion on this page, send an email in English to Annamária Bálint at annamaria.balint@bbj.hu
American Chamber of Commerce in Hungary (AmCham)
Canadian Chamber of Commerce in Hungary (CCCH) The CCCH provides advocacy and support to its members at both local and regional levels and offers excellent opportunities for companies to connect with other business partners, helping to grow the local economy. The organization provides bilateral networking opportunities for companies through a wide range of events, such as its Business Breakfast, which is held at various members’ premises from time to time, Canada Day, an annual BBQ, and the biggest event of the year, the Lobster Night, which in 2023 was also launched in Szeged. A Carbon Capture and Storage Forum will be held in 2024, co-hosted by the CCCH and the Equilibrium Institute, to address one of the century’s biggest problems, the greenhouse effect and global warming. Watch this space for more details.
German-Hungarian Chamber of Industry and Commerce (DUIHK) After an eventful anniversary year in 2023, the DUIHK is already looking ahead to 2024. The traditional annual kick-off event on Jan. 25 will report on the chamber’s planned activities and priorities for the new year. Given the rapidly growing importance of innovation and research and development for member companies, Hungary’s Minister of Culture and Innovation János Csák and the CEO of the Investment Promotion Agency HIPA, István Joó will address the audience.
French Chamber of Commerce in Hungary (CCIFH) On Dec. 12, the CCIFH held its year-closing reception in Novotel Budapest City Hotel with more than 100 participants. After the presentations of new members, a memorandum of understanding was signed between the Hungarian Export Promotion Agency (Hepa) and the CCIFH for another three years of cooperation. The agreement aims to continue strengthening the French business community in Hungary, expanding the partner network, mutually promoting each other’s services, joint organization of supplier days featuring significant French companies, and preparing joint delegations for professional exhibitions in France. In cooperation with the Belgian Business Club in Hungary, the Joint Ventures Association, the Swedish Chamber of Commerce in Hungary and the Swiss Hungarian Chamber of Commerce, and with professional partner Mapi Magyar Fejlesztési Iroda Zrt., the CCIFH will hold its year-opening business lunch with Minister for National Economy Márton Nagy. The theme of his English-language presentation (without translation) will be “The 2024 Economic Outlook for Hungary.” • When: Jan. 23, noon-2 p.m. • Where: Kempinski Hotel Corvinus Budapest, Erzsébet tér 7-8, 1051 Budapest • Fee: Chamber members, HUF 28,900 + VAT/person; non-members, HUF 43,500 + VAT/person.
Belgian Business Club in Hungary (Belgabiz) Belgabiz continued its tradition of starting the year with a grand networking reception in The Three Corners Lifestyle Hotel. On Jan. 11, members and friends of Belgium gathered to spend a sparkling evening together filled with delightful gastronomic surprises prepared by celebrity chef Márk Wirgha. The event was an excellent networking opportunity for inspiring exchanges in a light atmosphere, with a touch of Belgian hospitality, while enjoying the charm and cozy elegance of the hotel.
Italian Chamber of Commerce for Hungary (CCIU) As per EU-Chambers regulations, Bernardino Pusceddu, the president of the CCIU, took over the rotating yearly presidency of the lobby group from Jan. 1, 2024. At the end of last year, a preparatory meeting was held with the representatives of several European Chambers of Commerce and EU Business Associations in Hungary. The meeting planned future strategies and raised issues vital to shaping strong collaboration among EU economic players in Hungary. The primary focus was identifying the challenges and opportunities
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presented by the new year, including the Hungarian Presidency of the EU. There is also a desire to make the most of the experience of the outgoing EU-Chambers president, Damien O’Kane of the Irish-Hungarian Business Circle, who will be vice president of the association for the current year. This synergistic approach is essential to ensure the most successful transition and the organization of future events. Pusceddu underlined the importance of collaboration between the chambers of commerce, highlighting the need
AmCham will host Minister for National Economy Márton Nagy at its first Business Forum of the year. The event will provide insights into the ministry’s portfolio and its priorities for 2024 and cover vital topics that address the current economic situation, including employment policies. Following the minister’s keynote speech, a dedicated Q&A session will unfold to allow for meaningful discussions among business leaders and key stakeholders. The Business Forum will conclude with a networking luncheon, allowing attendees to connect and collaborate. • When: Feb. 01, 11:45 a.m. • Where: To be confirmed • Cost: Members HUF 29,990 + VAT/person; non-members HUF 40,000 + VAT/person.
Swiss Hungarian Chamber of Commerce (Swisscham) The next online webinar of Swisscham’s CEE-SWISS Impulse Sessions series will focus on “Material Innovations for a Sustainable Future.” How can material research help solve the current challenges? The webinar will be held by Tanja Zimmermann, director of the Swiss Federal Laboratories for Materials Science and Technology (Empa) and professor of materials science at ETH Zurich and EPF Lausanne. • When: Jan. 16, 11-11:45 a.m. • Where: online
British Chamber of Commerce in Hungary (BCCH)
for effective coordination to avoid overlaps. He emphasized the vital role that cooperation between members can play in the success of the 2024 program. A willingness to collaborate, coordinate and learn from previous years will define the organization’s future success, underlining the importance of a shared commitment to addressing economic and commercial challenges in an increasingly complex European and worldwide context. The CCIU looks forward to working closely with all EU member states in Hungary during its presidency to ensure common targets are reached.
The BCCH New Year will start with the next CEO Dinner event, with Nimród Kovács, entrepreneur and investor in FirstMed, one of the chamber’s longest-standing private healthcare members. The CEO Dinners feature a luxurious three-course meal with wine and welcome drinks, while guests get to hear from a foremost expert on recent industry developments. Kovács started his 35-year business career as an ad man on Madison Avenue, continued as a cable guy in Denver, and worked around the world setting up and managing cable, media, and telecom businesses such as UPC Hungary for many years before settling back in his native city of Budapest. He now enjoys a more peaceful life as an investor, philanthropist, and nature-loving vintner. • When: Feb. 8, 5:30-8 p.m. • Where: Matild Palace Hotel, Váci u. 36, Budapest 1056 • Fee: Members, HUF 28,000 (incl. VAT); nonmembers, HUF 38,000 (incl. VAT)
Opening a business doesn’t make you a businessman.