German Investors Push for Euro Adoption in Hungary Amid Forint Instability

EU | April 24, 2024, Wednesday // 12:19|  views

As the Hungarian forint experiences volatility, German investors are increasingly advocating for Hungary to adopt the euro, reaching the highest level of support in over a decade, according to a survey conducted by the German-Hungarian Chamber of Commerce and Industry.

The survey, which polled 241 investors between February 19 and March 20, revealed a significant surge in favor of Hungary's integration into the eurozone, with 73% expressing support. This marks a notable increase from previous years, where support hovered around 50% in 2016 and 2017.

The fluctuating forint has been a driving factor behind this shift in sentiment, as investors seek stability and reassurance amidst economic uncertainties. The forint's instability has underscored concerns about the broader economic landscape, prompting calls for Hungary to embrace the euro as a means of mitigating risks and enhancing market predictability.

In addition to currency concerns, the survey highlighted dissatisfaction among investors regarding legal certainty in Hungary. Half of the respondents voiced discontent with the current state of legal frameworks, citing a general deterioration in the predictability of economic policy. Increased government intervention in market development has further exacerbated these concerns, contributing to a climate of uncertainty for investors.

Despite growing support for euro adoption, Hungary's government led by Prime Minister Viktor Orbán has yet to establish a target date for integration into the Eurozone. Meanwhile, the central bank recently announced a cut to the main interest rate, reducing it to 7.75% in an effort to address economic challenges and stimulate growth.

While discussions surrounding Hungary's currency future continue, the sentiments of German investors underscore the pressing need for stability and clarity in economic policies to foster a conducive environment for investment and growth.

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Tags: Hungarian, forint, euro, German


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