The Hungarian economy is performing well, despite all the turmoil Europe finds itself in currently, according to Kinstellar Budapest Managing Partner Kristof Ferenczi.
“The war in Ukraine is affecting everything, and our business is no different,” Ferenczi begins. “We made huge efforts to help all our colleagues in our Kyiv office get out of harm’s way and provide humanitarian support to those in need – that’s been our number one priority and preoccupation lately.”
Also, Ferenczi sees an increased demand for relocations of both businesses and individuals. “We’ve gotten more and more inquiries from companies that have been operating in Ukraine about relocating and over a quarter of a million people have migrated to Hungary already,” he reports. “This is the second-highest number in all of Europe, second only to Poland. In an effort to ease the movement of those fleeing the war, the Hungarian government was among the first ones to lift all obstacles and requirements for entry from Ukraine.”
“Another consequence of the war is the sanctions fallout,” Ferenczi continues. “The sanctions put in place by the US, the UK, and the EU have far-reaching ramifications for all economies in Europe, not just our own. To the extent to which the sanctions will remain in place, this will have an impact on a number of European markets,” he predicts.
Moving away from the war, Ferenczi reports of healthy dynamism on the Hungarian market. “There is a lot of movement in the energy sector and this increased investor interest is accompanied by legislative changes as well,” he says. “There were changes made to the regulatory rules concerning renewables, in particular the tender rules for large renewable energy projects, especially for photovoltaic power plants.” Investor interest is high, which is an indication of a good trend: “investors are all the more mindful of the need to balance the energy impact of their undertakings with other sustainability goals,” Ferenczi adds.
In addition to the energy sector, Ferenczi reports strong activities in the banking sector, “with banks exiting the market, followed by other banks acquiring the left-over assets and general consolidation” on the market. “Also, there is strong activity in the medical services sector – investors are looking for more targets to invest in here as well,” he says.
However, there is also an expectation of a potential wave of restructurings hitting the market before long. “As a consequence of all that has been going on in recent times, we can say that a number of companies will soon be facing a turning point,” Ferenczi concludes.