More and more foreign workers are flooding Hungary
The number of foreign nationals residing in Hungary has been steadily increasing over the past decade. As of January, foreign nationals accounted for 2.3 percent of the country’s population.
Neighbouring countries’ nationals constituted half of the foreign population in 2013. However, their share has declined and stabilised at around 35-37 percent since 2019. In January, approximately two-thirds of foreigners in Hungary were European citizens. The remaining 29 percent came from Asia, 4 percent from Africa and 3.4 percent from the Americas, writes Portfolio.
Where do they come from?
Official figures show that the number of foreign workers in Hungary increased by 14 percent. It was up to 81,000 in the previous year. Ukrainian workers accounted for the largest increase, with 5,200 more workers arriving in one year.
Additionally, the analysis by the Hungarian Central Statistical Office (KSH) indicates that there is a slight shift in nationalities, with an increase in employees from non-EU countries such as the Philippines and India. This change is attributed to the relaxation of admission conditions for workers from several non-EU countries.
Foreign migratory trend
At the beginning of 2019, Hungarian companies employed approximately 50,000 foreign workers. This number rose to 60,000 by the end of that year, before seeing a decline during the Covid crisis. However, the temporary decline was soon followed by a resumption of the trend of growth in foreign employment.
Experts believe that the trend of increased influx of foreign workers and residents will persist. The government argues that the availability of sufficient workforce, which requires the employment of guest workers at least on a temporary basis, is crucial to maintain and develop investments and ensure competitiveness.
Way for development or dead end?
Meeting the above-mentioned labour needs is essential to retain Hungarian jobs and attract foreign investment to the country. Although some regions have extremely low unemployment rates, new labour sources are required to support investments and draw in foreign investors. This has to be done, as the existing reserves of Hungarian workers are insufficient.
But some analysts argue that increasing the labour force may not be the best way for a country to catch up.
“The question arises whether extensive growth based on attracting additional labour is the right way for the Hungarian economy to catch up. Wouldn’t it be better to take advantage of the constraints of labour scarcity to move on and start to lead the country towards higher value-added, more efficient, less labour-intensive sectors?”
- asks Orsolya Nyeste, chief economist at Erste Bank.
She further added, that by investing in human capital, improving education and healthcare, we would be more likely to break out of the middle-income trap than by importing large numbers of foreign labour.
Source: Portfolio