Billions of Dollars in Remittances Flow to Hungary: A Closer Look at Big Money
Hungarians working abroad play a significant role in the country’s economy, not only by filling the labor shortage at home but also by sending billions of dollars in remittances back to Hungary every year.
A recent conference organized by the Hungarian Economic Society discussed the impact of Hungarians working abroad on the country’s economy. Experts highlighted the importance of remittances in sustaining social welfare systems and fueling economic growth in Hungary.
The conference emphasized the interconnected nature of emigration and labor shortages in Hungary. While emigration may have positive effects on certain economic indicators, such as reducing unemployment rates, it also contributes to a decline in the local population and active workforce. The return of emigrants is seen as crucial for the country’s social care, economic competitiveness, and overall growth.
According to UN data, the number of Hungarians living and working abroad has been steadily increasing, reaching over 714,000 by 2020. Despite the rise in emigration, Hungary’s relative emigration rates are not exceptionally high compared to other countries in the region.
Remittances sent by expatriate workers to Hungary have been a reliable source of income for the country, accounting for 2-3% of GDP in recent years. However, there was a slight drop in remittances in 2020, likely due to the effects of the pandemic. Economists highlight the stability of remittances compared to other forms of capital flow, making them a crucial component of Hungary’s economy.
Looking towards the future, analysts predict a slight decrease in the size of the Hungarian labor force between 2023 and 2028, with a corresponding decline in remittances. Encouraging the return of emigrants back to Hungary is seen as a key strategy to boost economic growth, with even a small percentage of returnees expected to have a positive impact on the country’s economy.
In conclusion, Hungarians working abroad and the remittances they send back home are integral to Hungary’s economic landscape. The government and policymakers must address the challenges posed by emigration while also recognizing the benefits that expatriate workers bring to the country. By fostering an environment that encourages the return of emigrants, Hungary can continue to thrive and grow economically in the coming years.
