Hungarian CEOs are optimistic about future, despite challenges

09 April 2018 5 min. read

According to new analysis, Hungarian businesses are expecting growth despite major challenges such as labour shortage and over-regulation. Their economic optimism is a marked increase over Hungarian CEOs’ dour outlook from last year, which misjudged a remarkably stable 2017.

Since 2011, PwC has conducted surveys of Hungarian CEOs to gain insight into their thinking and strategic direction. The Hungarian survey also allows for a comparison with results from a broader global survey of CEOs, now in its 21st year. In the final quarter of 2017, the researchers surveyed 165 CEOs in Hungary – and nearly 1,300 CEOs globally – across 7 industries.

For the second year in a row, 89% of Hungarian CEOs are confident about their own revenue growth. Their confidence about Hungarian economic growth has not changed significantly (55% vs 56% in last year’s survey), while their confidence in global growth has increased 8 points to 47 – reflecting a surge in global CEOs’ optimism on prospects for economic growth.

 Sources of optimism

Commenting on the results, Nick Kos, PwC Hungary’s Country Managing Partner, suggested that the renewed optimism about global growth reflects the fact that 2017 was a year of relative economic stability, even though CEOs saw great risk at the beginning of the year. Instead, he said, “the United States and China gained further strength, while Russia and Brazil slowly embarked on a path to economic recovery. Concerns over the future of the Eurozone in the wake of Brexit have also eased somewhat.”

“While last year expectations were driven by risks, this year CEOs, both in Hungary and worldwide, are rightfully optimistic in their outlook for the global economy,” Kos added.

Foreign markets

Almost half of Hungarian CEOs reported Germany as the most important foreign market in relation to their company’s growth prospects. Romania moved into second place, with 27%, while the US slipped to third place. Russia saw the largest decline – 8 points – while the UK appears to have not suffered a setback despite Brexit approaching.

 Threats in Hungary and globally

The analysis suggests Romania’s increasing importance to Hungarian growth prospects is related to three factors; geographical proximity, easier networking with the Hungarian minority in Romania, and the large Romanian market (roughly twice the size of Hungary’s).

The decline in the importance of Russia for Hungarian growth, in the eyes of its CEOs, could be because of the economic stagnation of Russia’s resource-based economy, or because of their increasingly aggressive foreign policy. Hungarians remember the Soviet incursion of 1956, and recent Russian aggression in Ukraine, along with the annexation of Crimea, likely does not raise the confidence of Hungarian business leaders. War and territory-grasping does not make for good business.


While global CEOs are increasingly anxious about broader societal threats such as terrorism and climate change, Hungarian CEOs are more inwardly focused on problems related to their domestic workforce. There was a 20% increase from last year in the number of global CEOs who saw terrorism or climate change as the chief threat to their growth prospects.

 Market realities and attractions

PwC reports that Hungarian business leaders seem less concerned about these global threats, possibly because they see Hungary as being less affected by them. Instead, Hungarian CEOs are almost unanimously worried about the availability of key skills (95% vs 79% of global CEOs), the aging of the workforce (76% vs 59% of global CEOs), and the spectre of rising employee benefits (73% vs 59% of global CEOs). Hungarian CEOs are less perturbed than their global counterparts about domestic populism, protectionism, cyber threats, and technological change, among other categories.

While 55% of Hungarian CEOs are planning on increasing the number of employees at their company (an increase of 4% from last year), they are concerned by a perceived skills and labour shortage. 59% reported that it was difficult to recruit staff with the right digital skills, and 84% found it difficult to recruit skilled talent.

Hungarian CEOs report that globalisation has improved the ease of moving capital, people, goods and information, and that it has helped enable universal connectivity. However, most do not believe that globalisation has helped close the gap between rich and poor, nor that it has aided the integrity and effectiveness of global tax systems.

Globalisation closing and opening the gap

Despite the challenges, Hungarian CEOs seem to believe the coming year will be a good one, in terms of economic growth for Hungarian firms, at least. “I expect CEOs’ optimism to continue, as we look forward to a more peaceful and predictable year,” Nick Kos concluded.