Hungary Economy: Population, GDP, Inflation, Business, Trade
The Hungarian economy is ranked as the 55th freest according to 2018 statistics. This economy has undergone a lot of transformation and it has particularly improved in the areas of the judiciary, labor freedom and investment. There are some realms however that have not seen great improvements especially in the areas of business freedom, government integrity, and property rights. In overall, Hungary is below average in most metrics in Europe compared to other peers in the region. The country is also just above the world average on the global scale.
Looking at its recent past, this country has seen a bit of relapse into some laws that were previously abandoned. The country has definitely seen much freer and liberal laws in recent years just before the government began to intervene in the areas of policy. Much of the changes over the years have been instituted to support economic growth and to balance out the budget while steering clear of areas that might cause conflict with the European Union. There are many targets that the government has including reducing public debt. It plans to achieve all of them by taking an active role and instituting sectoral laws.
The history of Hungary is long and colorful. It was once part of the communist realm until 1990 when it became completely independent. The country is currently a member of NATO having been in the organization since 1999. When the EU was formed, Hungary was not among the founding members and only joined the organization in 2004. There have been numerous economic reforms in the last decade and today, the economy is supported by strong local demand as well as exports. In recent years, things have been looking very optimistic for the country. The construction industry has boomed and there is a hands-on approach by the government on economic matters. The unemployment rate in the country is low.
Despite these improvements, there are still some challenges that face the government. It is for instance not as open as it ought to be and the judiciary is weak and subject to government interference. The policies surrounding land tenure are pretty straightforward and the government keeps updated records. Because of its somewhat domineering government and a weak judiciary, there are always concerns about corruption. The business sector is thus highly affected by the apparent indifference in the government towards corruption. A lot more needs to be done by the government to deal with prominent figures who have been a menace to business.
Moving on to the financial sector, there is a generally fair support by the government to the financial markets. The tax for corporates is maintained at 19% and tax for individuals is at 15%. The stock market is pretty vibrant with the Budapest SE index enjoying some good figures in recent years. Forex traders can do many things in this country even though the market is not as developed especially compared to the West. Forex trading is supported a lot and there are dedicated providers that allow Hungarians to access tens of thousands of markets.
As a country that is still developing many sectors, Hungary has a government that has a direct oversight over some sectors. You will thus often find direct government support for some industries. There are some sectors where there is not enough manpower. The labor regulations are somewhat basic which makes mobility a little difficult. Most of the product prices are market-determined but some goods’ prices are regulated by the government. Some of the areas in which the government has a hand on the prices include the markets of pharmaceuticals, tobacco, digital money, some machinery and electronic appliances and telecommunication products.
The health of the economy is definitely good considering that the trading industry is pretty vibrant. Hungary relies a lot on both exporting and importing goods. The total value of goods that either leave or enter the country comprises of up to 175% of the GDP. There are no strict tariff regulations and there is a general preservation of a 1.6% tariff rate. While there is much more government presence in many areas of the economy, the impact is not too big to disrupt economic activities. The financial sector is still in its formative years and it will take sometime before the banks get the necessary regulatory policy that supports growth.
Protecting Your Business From Rising Fuel Costs
The cost of fuel is soaring globally, due to various factors, including the coronavirus pandemic and the ongoing conflict in Ukraine.
Businesses everywhere are feeling the burden that comes with increased energy costs. However, there are a number of things that experts have determined companies can do to fight back and protect their businesses from rising fuel costs.
Implement green measures
Dusistainbility has been a big trend in global business in recent years. Companies that have not yet embraced measures such as the paperless office and the use of solar power, many find that doing so now could help to offset some of the extra costs arising due to higher gas, oil, and electricity prices.
A four-day week
The benefits of a four-day week for employers and their employees have long been debated, but there is a lot of evidence to suggest that companies can be run just as efficiently in four days as they can in five. This could give companies struggling with the cost of heating, and lighting their offices, or running their machinery the opportunity they need to protect their business from fuel costs without losing money.
Should a factory, for example, close for one extra day per week, they would save 20 percent of its operating costs, and studies have shown that employees who work four days a week are around 20 percent more productive, which means they could save a great deal on the ongoing cost of fuel, without ruining their productivity or losing revenue. Many experts believe this to be a win-win situation.
Of course, when the price of fuel rises, in certain industries, customers may be affected by those costs, and therefore less likely to make the same level of purchases they once did. Companies who find themselves in this position need to do whatever they can to encourage customers to buy.
For example, Volvo Penta, which sell luxury yacht and marine engines, among other applications, may find that due to the cost of fueling a vessel, fewer people are going out o their boats, causing sales to drop. By making special offers or putting together attractive packages, they can encourage more purchases to be made. If the product is good, and the price is right, it is easier to weather this particular storm.
Now that remote working is easier than ever, downsizing office space is set to be another important way that companies around the world can protect themselves from the rising cost of fuel. The fewer employees who need to be in the office or onsite, the smaller the office space can be, and the fewer resources will be required to keep it running smoothly, so expect to see more homeworking going forward.
The cost of fuel may be set to rise even further in the Autumn, and no one knows exactly what will happen beyond that, but there are a number of things businesses can do in mitigation, so it is almost certainly not time to panic yet.
Joao Vale e Azevedo: pessimistic prospects could be tackled by collectivity
As we enter the new year, the effects of 2021 are now echoing in the economy in 2022. According to the World Bank’s latest Global Economic Prospects report, global growth is expected to decelerate markedly from 5.5 in 2021 to 4.1 in 2002 and 3.2 percent in 2023. This has been proposed both in the case of developing and major economies, such as the case of the United States.
In 2021, governments around the world have suggested that it was a year of rebirth. However, current numbers are not showing that and so not everyone is trusting on this bet. This is the case of Joao Vale e Azevedo, chairman of KUNST Global – an equity firm based in London, Geneva, Zurich and Luxembourg. For him, the forecast is still negative for 2022 as inflation keeps on running critically in the US and in many European countries. But unlike in the 1970s and 1980s, the solution won’t lie in governments printing money like they did in the past.
The chairman of KUNST Global also doesn’t think that the so-called commodity crisis is temporary as the news might say. In fact, Azevedo believes that there is more to it than the effects of the pandemic. While the Covid-19 crisis has ignited the growth of e-commerce, Azevedo claims that this intensification in demand for goods would happen anyway and the problem is actually in the distribution industry: “It is unable to meet this increased demand. There is no labor, no trucks, nor ships. The offer is no longer able to meet the market demand and this is not a contingency, it is a physiological fact.”
Finally, the third and possibly the most concerning problem is the price of energy. “This is really a worrying question, and not only for our distant future, as it has been up to now, but also for our present,” explains Azevedo. “We are witnessing it on a daily basis: electricity and gas bills have skyrocketed. Families and companies, which were already suffering from the pandemic, do not know how to cope with the increases.”
Although propositions like moving from coal to gas or from oil to electricity may point the way out, Azevedo thinks we are completely deprived of the infrastructure and funds necessary to manage this change. What is more, the chairman of KUNST Global argues that present politics lacks long-term vision, which means politicians are often too focused on electoral cycles instead of considering the future – thus mining any possibility of investments for change.
In addition to that, Azevedo has been keeping a close eye on the war in Ukraine. In his opinion, if Russia persists in carrying on the war, not only this country will be doomed to bankruptcy, but the whole West could face a domino effect. “Regardless of this, the war in Ukraine means greater market instability, rising energy prices that are already out of control, and a further increase in inflation, which could reach double the current levels,” he adds.
However, not all hope is lost. Hopefully, the war in Ukraine will find a rapid resolution, which is something that could catalyze even more this sense of collectivity that Joao Vale e Azevedo sees growing after two years of pandemic. “The fact that we have had fewer opportunities for interaction has meant that we are now more aware of the value of those interactions, and probably also of human life. We are a stronger community. The challenges that await us are very difficult, but together we are much better prepared to face them,” he concludes.
How People Around The World Are Investing Their Money
One thing that everyone should aim to do with their spare cash is to invest it – as wisely as possible, but at least in a way which is going to lead to potentially high returns. If done correctly and with a bit of good fortune, it is perfectly easy to improve one’s wealth to a considerable degree this way, and it is therefore well worth people considering this.
As it happens, there are a lot of investment options that people are making use of all over the world, with some that are especially popular right now. Let’s take a look in some detail at some of the major ways in which people are investing their money – and making some considerable gains, in many cases.
Stocks & Shares
Arguably one of the most popular forms of investment is stocks and shares – which can be incredibly lucrative if it is done in the right way, and with the right set of circumstances behind an investment. Indeed, stocks and shares remain the number one investment that people are engaging in every day throughout the world, and with good reason. Not only is it potentially something that can bring considerable returns, it is also relatively straightforward to get into and learn at least the basics of, making it a very simple and easy form of investment for most people.
It also doesn’t require a huge amount of money to get going – although having that is obviously not going to hurt one’s chances of success starting out! In fact, it’s doable to get going with stocks and shares with literally a few spare pennies – so it really is something that pretty much anyone can get into and make use of. It can also be a good way to diversify and widen out a portfolio that may include other forms of investment as well.
Although many people think of investment and savings as two different things, they are really just two sides of the same coin. You can think of saving as a form of investment, especially if it is done in the right manner and with the right approach. Of course, in order to find success with this, it is important to make sure that you are choosing the best savings account there is. That means one that has a high enough interest rate for it to be worth it, as well as having other functions that might be important to an individual – such as the ability to take money out whenever you need to, for instance.
With interest rates diving all over the world, this is quickly becoming one of the less popular forms of investment – but for now it is still worth considering, as it can be a good way to at least store your spare cash as necessary. If nothing else, you’ll probably find that you are able to find yourself in a much better financial position this way soon enough, even if that doesn’t happen as quickly as it might with certain other investments.
Although there is some controversy around cryptocurrencies, there is no doubt that it is one of the world’s most popular forms of investment right now. There is also no doubt that it’s possible to make a lot of money this way – as some of the world’s richest people have done so already. Even in a much lesser sense, however, it is perfectly possible for an individual with a regular amount of wealth to make money investing in cryptocurrencies. And generally, this is done in a few key ways.
First of all, you can simply buy some crypto and then hold on to it, hoping for its value to improve and selling it on once it has done so. Alternatively, you might want to consider trading crypto coins by buying one kind and then trading into another as you think it might be lucrative. This takes a bit more knowledge, patience and skill, but the returns can be significant. Either of these can work very well, however, and they are worth thinking about at the very least.
A related form of investment, in that it too relies upon blockchain technology, is NFTs. These pieces of art can be bought and traded as above, and some of them are creating huge amounts of money for people right now, so it might well be worth getting into.
Another form of investment that a lot of people are getting into in the past few years is something known as spread betting. This is where you place bets on a variety of outcomes on a particular event, whether it’s a sport, a political event or whatever else it might be. With the right bet and the right outcome, this can be a really effective way to make some money, and it is best done with the attitude of it being an investment rather than a bet – as this helps in keeping things a little more sensible.
To make the right decisions, it is helpful to be patient and work out what kinds of results are likely to occur, and to find them at a good price. Searching for NHL picks and horse racing tips is a good place to start for that. However it might be done, with care and attention this can prove to be a decent way to invest some spare money, so it is definitely something to think about.
If you are particularly keen for a very safe form of investment, it is well worth looking into bonds. Bonds are something like a savings account, but with an important difference that needs to be understood well in order to make good use of them. Essentially, you buy a bond and you will be paid back your initial investment, plus any interest that may have accrued along the way too. They are very low-risk and yet can bring you a lot of money over the long-term, so they are worth looking into for pretty much anyone looking to make a little money on the side.
Bear in mind that you won’t be able to access the money during the fixed rate period, so you should only invest whatever you don’t need to have immediate access to. However, they offer higher interest rates than your average savings account, so it can be worth it.
Another form of investment that many people around the world are investing in right now is precious metals. In truth, these are always popular, and it’s not too hard to appreciate why. After all, precious metals will generally always retain their value even when everything else in the world is going through turmoil. That is especially true of gold, which still holds the standard that the global economy works by – with the exception of cryptocurrency.
As you can see, precious metals are almost certainly worth considering at the very least if you want to invest your money wisely. But make sure that you are only putting what you can afford to lose into this investment, like any other. Although it is not the highest-risk investment, it is not zero-risk either.
Those are just some of the most popular investments around the world that people are making good use of right now. Any of these could be lucrative and useful for you, so take a look at them in turn and see whether any of them are suitable for your needs and purposes. You might be surprised at how effective they can be.
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