Xpat Opinion: Tourism, Employment: Hungary’s Recovery Trends

  • 22 Oct 2013 9:00 AM
Xpat Opinion: Tourism, Employment: Hungary’s Recovery Trends
While the government shutdown in the United States and a risk of default send shivers through the global economy, recent figures in Hungary continue to encourage cautious optimism, building on positive indicators I reported last month. Indeed, the government has drawn up budgets for 2014 based on a GDP growth estimate of 2 percent. That is 0.6% lower than what Bank of America Merrill Lynch predicts and somewhat more ambitious than the IMF forecast, which seems a bit off.

Among the recent indicators, one of the most exciting is the significant uptick in the tourism industry, with 13.7 percent more guest nights in 2013 than last year and a 12 percent increase in domestic tourism. The tourists are out in greater numbers, and they’re also spending more. We saw an increase of 5.7 percent in the first half of 2013 compared to the first half of 2012.

The jump in domestic retail sales is another reason for optimism. Sales grew 1.2 percent in July and 1.5 percent in August. This increase in consumer spending, a barometer of economic health and confidence, is likely driven by better wages and more people with jobs, which recently hit a historic high. Importantly, consumers only increase spending when they are confident in their economy’s stability and potential for growth. With the employment at record high and real wages rising, the future is beginning to brighten for many.

According to Minister of State Zoltán Cséfalvay, Hungary and other countries of central and eastern Europe are poised to become the growth engine of Europe. Politicians, businesses and consumers alike see that Hungary’s recovery is getting under way. And while there are uncertainties ahead, we’re back on track to reach our pre-crisis levels of economic health.

By Ferenc Kumin

Source: A Blog About Hungary

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