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Hungary's election is being fought on politics, but will it be decided by the economy?
The last 12 months, the energy is very bad.
Economically, everything goes backward.
We were hit by huge inflation.
Companies have moved away from expansion and now they focus on cost optimization and restructuring.
It's World Business Report from the BBC World Service.
I'm Leanna Byrne.
As Hungary heads to the polls, we look beyond the politics to what businesses and workers are actually experiencing.
In the US, rising fuel costs push inflation higher, and how the Iran war is hitting India's glass industry.
Yeah, so Hungarians go to the polls this weekend.
It's an election being watched the world over.
In one corner is the Prime Minister, Viktor Orban, whose supporters see him as standing up for them and Hungary, defending Christian and patriotic values while keeping out of Russia's war with Ukraine.
Viktor Orbán is a very strong leader.
He's the best person to stand up for this country against the headwinds coming from EU leaders in Brussels.
He's modernised the hospitals, supported the churches and he's done a lot for families and for pensioners like me.
I support him because he helps families and especially because of the cap he has imposed on utility bills and the cap on fuel prices.
Now,
Meanwhile, in the other corner is the challenger Peter Magyar and his Tisza party, whose backers see him as a prospect for change.
Someone who can take the country away from what they see as the corruption of the Orban years.
I really want a big change.
I believe he is a very honest person.
He always says the truth.
He discovered... many bad things that Orbán did.
There's a big new solidarity among the Hungarians.
The people believe in themselves again.
And we can hardly wait for the election, because of the huge corruption of the politicians.
They've taken the country in a bad direction.
Whatever happens, this government will be out.
This nation, cannot tolerate them any longer.
Orban, an ally of Vladimir Putin, has the backing of the White House too, with US Vice President JD.
Vance in Budapest on Tuesday to show his support.
He suggested one of the reasons Mr Orban was struggling was due to foreign meddling.
What has happened in the midst of this election campaign is one of the worst examples of foreign and election interference that I've ever seen or ever even read about.
The bureaucrats in Brussels have tried to destroy the economy of Hungary.
They have tried to make... hungry, less energy independent.
They have tried to drive up costs for Hungarian consumers.
And they've done it all because they hate this guy.
But for businesses and workers, the bigger question is what happens next for the economy?
After years of strong investment, there are signs things are slowing.
Hiring is cooling, key industries are under pressure and some companies are holding back on big decisions until the political picture becomes clearer.
Zuza Gardouche is Managing Director of the recruitment firm Jobs Garden in Budapest.
I asked her what she's seeing right now.
It's becoming more cautious, absolutely.
Because at the moment we are seeing a period of extreme caution and structural realignment from many industries.
Compared to the previous year, where we had the unemployment rate at 42 45, now we have a steady increase in unemployment throughout 2025 and into 2026, which is quite surprising seeing the previous years.
So the significant change is now we are up to 48 and we expect further increasement, meaning that there is a shift in bargaining power which has moved from back to employers.
So what change do you think to make it go that way?
Companies have moved away from expansion and now they focus on cost optimization and restructuring, making the recruitment process much slower and more selective, in one hand, because of the global economical trends.
This heavily affects the hungarian economy because we are a so-called small country compared to other big economy, So it influenced the companies here in Hungary, not just the local SMEs, but as well as the larger companies, and what we can see.
So let's start just to see the different industries, because the market at the moment is highly fragmented.
We see a major downturn in the automotive sector, where there are more and more layoffs, especially in the RD part and the white color positions.
And the construction industry is also in deep crisis here in Hungary due to the combination of sharp drop in state investment and standstill in the residential projects.
Those are parts of the economy that are struggling.
So is there any part of the economy where you're actually seeing resilience or demand for workers?
Yeah, the banking, finance, energy, pharmaceutical and tourism, they are still resilient.
The business support center sector is pretty strong here in Hungary, Budapest mainly.
In this sector, we see a strong shifting.
Transactional roles are either being offshored, mostly to India or other Asian countries, or fully automated by AI.
And IT sector is an interesting one, because what we can see that they are rather focusing on cost optimization.
And they are not just IT, but I would say everywhere.
Companies are focusing when they recruit on high profile, high caliber, very senior experts.
That was Zuza Gardu, managing director at the recruitment firm Jobs Garden in Budapest.
I also spoke to Hubert Latsky-Schlitter, a restaurateur behind Michelin-starred venues including Kiosk and Babel, based in Budapest.
He's told me he's moved away from the country.
I moved to Sweden because I'm gay and it was just impossible to live in Hungary for the last few years for many, many reasons.
I fly back and forth to the country like every second or third week usually.
And the last 12 months, the energy is very bad as soon as you land in the country.
Economically, everything goes backward.
You know, we were hit by huge inflation.
So all the food and ingredients, basically, they doubled the price.
We had like...
90% or something like that around inflation in the last three years altogether.
And, of course, the market doesn't really grow because the whole moral situation is putting a stamp on it.
The economical situation, as well as the global political situation, started with the Ukraine-Russian war.
So it's very difficult.
And what exactly are you paying more for now in your restaurants?
So we had that energy crisis.
We pay a lot of taxes.
Like on the drinks, you have 27% VAT.
On the food, it's only 5% now.
But we used to have 4 tourism support tax, which is something unfair because you don't get anything for that.
Now they cut it for only for two percent, but still even locals are paying these taxes, you know, and people, they invest actually already for this industry a lot and also the human resources.
We are competing with european big cities basically, Also the housing situation makes it very expensive.
So people need to earn more.
But at one point you know you can't increase the prices of the restaurant because otherwise nobody would come.
So it's very difficult to balance somewhere where people are still coming.
It's more like occasional when they go, most of them.
So it's not like it used to be.
They are, you know, heading out to a restaurant twice a week or every week.
So if somebody went once a week to a restaurant, now they go once a month to a restaurant and we have less visitors.
So it's not easy.
It's not easy.
I'm wondering, how are you keeping those restaurants going in that case?
I'm a very passionate person and I love what I do.
So I think long-term I took a credit now for the company because January, February was like 30 40 worse than the last year.
I never had this experience.
There is a hope that there's going to be a change this Sunday.
If there's going to be a change, I expect a positive change on everything.
But if the current government would win, we expect troubles yet.
We are about to lose everything we built in the last 20 years.
Well, what would need to change to make it easier for companies like yours to survive?
If there's no change now, then a lot of restaurants would close.
I'm one of the successful ones feeling like this and having this.
Regular restaurants are really suffering much more.
They hire much less people.
And it's a circle, you know.
It starts and then...
The next season is even less and less.
So if there's no change, a lot of places will close down and a lot of people would leave the country because you just can't deal with this.
That was Hubert Schlitter, who owns restaurants in Budapest.
So that sense of pressure on businesses and on consumers isn't just being felt in Hungary.
In the US we've got some signs that higher energy costs are starting to ripple through the wider economy.
Chris Lowe is chief economist at FHN Financial in New York.
Chris, thanks for joining us.
Thank you.
Now according to these latest figures inflation has picked up again.
Can you take us through these numbers Chris?
Yeah.
What we saw this morning was the consumer price index in March.
And it rose nine-tenths of a percent in one month's time.
The driving force behind that was motor fuel, which over the course of the month was up about 40%.
So an enormous increase.
It's In fact, the fastest increase in fuel prices we've ever seen.
And so it's hitting inflation very, very quickly.
At the same time we got the inflation numbers.
This morning we also saw from the University of Michigan a survey of consumer sentiment.
Consumer sentiment dropped by five and a half points.
It was already quite low.
And the latest reading.
This, for the first part of April, is the lowest in the history of the index, which goes back to the late 1960s.
Consumers told them that they were particularly worried about price increases affecting their ability to keep up with inflation.
The good news in that survey is that it was done in the first part of the month.
So 98% of the responses came in before the ceasefire was announced.
So if energy prices do come down, we may see some improvement when the final April numbers come in later this month.
Yeah, who knows, Chris, at this point.
Every single day is different, isn't it?
So people are paying more in terms of fuel and the sentiment has dropped.
Have consumers changed their behaviour because of this?
It's really difficult to tell at this point.
We do have weekly surveys that are done privately, but they're not very comprehensive.
What we can see in monthly data and I think this is quite important is that even before the war, in January and February, consumer spending slowed down quite a bit from last year's pace.
So my sense is consumers were already feeling –
Given the fact that we haven't had much job growth in the last year and income growth has slowed way down, I think they were already feeling the pinch.
Now, these huge increases in the cost of commuting, air travel and holidays is just going to be devastating.
It will force people to cut back on discretionary spending.
All right, Chris, you stay right there.
The dramatic stories of the families behind some of the world's biggest companies.
Inheritance from the BBC World Service.
Season one, Samsung pulls back the curtain on one of South Korea's most prominent families.
They are the equivalent of royalty, a symbol of the nation of South Korea.
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There's a succession-style drama underneath of all this.
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You're with World Business Report from the BBC World Service.
Now the war in the Middle East is having knock-on effects much further afield.
It's pushing up the cost of making glass in India and raising fears of shortages for drink companies.
A European industry lobby group has asked the Indian government to waive a 10 import duty on glass bottles and aluminium cans, arguing the conflict has disrupted supplies.
To help us make sense of this, I've been speaking to Varun Gupta, director of Triveni Pattern Glass in Adhara Pradesh and an executive committee member of the All India Glass Manufacturers Federation.
India imports about 50 55 percent of its natural gas requirement from around the world, out of which about 60 70 percent comes from Middle East.
Same with LPG.
Almost 60 percent of our LPG comes from Middle East and similar numbers with crude.
So India is heavily dependent on crude. various forms of fuels or natural gas.
Most of it has been disrupted.
Now these fuels are used to heat up glass furnaces, where the silica sand is melted and converted into glass bottles and other glass products.
So with the supply disrupted, there was a bit of rationing of respective fuels and the prices have also gone up multiple times in the open market for these fuels, which has some effect on the supply of glass bottles to Europe.
Now, brewers and European drinks groups want the 10% duty lifted.
From your standpoint, will that actually solve the problem quickly or only help a narrow set of importers?
If the duty is waived off, obviously it will bring down the price for the consumers or for the breweries, but it will not help the supply situation.
Although over the last week or so, the supply of fuels in India has increased.
So the breweries should start getting their bottles pretty quickly, because most of the glass is gone.
Bottles producing furnaces now are able to get almost 70 to 80 percent of their fuel requirement.
So they should be up and running back to their almost full capacity.
And we've heard reports of rising bottle costs and even partial shutdowns in parts of the industry.
So how severe is the situation from where you sit?
Rising costs is a reality because the fuel prices have gone up pretty substantially.
It's an open market, so it can't help that much.
People who don't have long-term contracts are exposed to the vagaries of the open market.
And even when people have long-term contracts, it's pretty much like a forced maturity situation.
So they are getting 50 70, 80 of their supplies, depending on how much their supplier is able to source.
Regarding running up of the furnaces, some furnaces may have to shut down for a while for a week or so, because LPG was really tight in India.
Most of it was diverted for the domestic cooking gas consumption.
But the government of India has really asked the refineries to produce as much LPG and with 30 increase in domestic production of LPG, the supplies of LPG for industries has really eased up, with it reaching to 70 of the pre-war levels.
So that has really helped and I think the industry should be meeting substantial part of their pre-war production volumes.
If the government did suspend that duty temporarily, would that actually undermine Indian manufacturers at exactly the moment when they're already under a huge amount of pressure?
Yes, it would undermine if, if the duties are not removed because the cost competitiveness see, the glass industry is suffering from a huge cost increase.
Most of the costs are being absorbed as of now by the industry, but certain costs are now beginning to get passed on to the consumers or to the customers, I guess, on the other hand, critics might say domestic manufacturers are actually benefiting from that duty staying in place.
What do you think?
No one is benefiting, I can assure you, in this time of war.
No one is benefiting from the current situation.
The pricing is through the roof, as I said, not only for gas or fuels, but even for certain other chemicals, because
Somewhere down the line in every industry.
The chemicals or the petroleum products do form part of some supply chain or the other.
So no one is benefiting from this war.
Is this mainly a problem for beer and spirits producers, or are other sectors like soft drinks pharmaceuticals food, bottled water etc.
Are they feeling it as well too?
It's across the board.
It's not restricted to beer or anything.
It's across the board.
All the bottles, whether it is pharmaceuticals, soft drinks or even other type of glasses like building glasses or glasses for solar photovoltaic modules, etc.
So it's not industry specific or sector specific.
It's all across because pretty much the same technology is used.
Now, how quickly could this situation improve if shipping routes normalised?
Are we talking days, weeks or do you think much longer?
Once the war ends, it will take about three to six months to normalize because in Middle East most of the LNG terminals have stopped.
The LNG refineries have stopped production.
They will need about four weeks to eight weeks to start.
And once they start producing, it will take another couple of months for the ships to arrive safely.
That was Varun Gupta, director of Treveni Pattern Glass in Andhra Pradesh.
Now let's go to Catalonia, in northeastern Spain, where in recent months there has been an outbreak of African swine fever.
The disease does not affect humans, but it is highly contagious and lethal for pigs and wild boar.
Swine fever has been detected in more than 200 wild boars since late last year, with major repercussions for Spain, which has Europe's biggest pork industry.
A police officer stops drivers and cyclists as they approach Collserola Park, just outside Barcelona, informing them of restrictions in place due to the outbreak of African swine fever.
The discovery of corpses of wild boar infected with the virus late last year triggered a major alert and the introduction of tight measures aimed at containing the outbreak.
The exact cause of the disease's arrival here is still not known.
But the thousands of wild boar that roam this area of Spain are seen as a major cause of its spread.
I'm with a group of Agents Rurales.
These are police officers who work in rural areas, and we're with two police dogs which are trying to trace the scent of wild boar in a wooded area just outside Barcelona.
They are searching for infected corpses, as well as live boars which are culled and then also tested for swine fever.
Oscar Odey is the Catalan regional minister for agriculture.
Being too permissive with wild animals has led to an overpopulation of rabbits, deer and wild boar.
The wild boar in particular caused a huge increase in traffic accidents and transmission of diseases.
We have to use all the resources available to defend our industry, our economy, our farming sector and farmers.
There's a lot at stake here.
So far at least, the virus remains restricted to the Barcelona area, and it hasn't infected any farms or farmed pigs.
But Spain's 25 billion euro pork industry is watching closely. and in many cases, nervously.
Two hours' drive from Barcelona, Jordi Saltiveri shows me round his pig farm, although tight biosecurity regulations mean I'm not allowed to meet the animals.
Jordi says the outbreak is already having an impact on his business and that of farmers across Spain.
Each pig has lost about 30 to 40 euros of its value.
We are worried because right now the economic impact is substantial.
But I also feel pretty calm and that swine fever will not get into our farms because they are fenced off and we have safety measures in place.
The reason for the drop in pork prices is a lack of demand.
The outbreak immediately caused several major markets, including Japan and the United States, to stop importing Spanish pork altogether.
Other markets, like China and the UK, have stopped importing pork from the Barcelona area.
One farmers' union estimates that the industry has already lost at least 600 million euros in revenue.
I'm in Sants Food Market in central Barcelona and I'm surrounded by food stalls selling fruit and veg cheese fish, spices and beef and pork as well.
Although many countries have stopped importing spanish pork products, the domestic market seems not to have been affected, at least at the moment, and i'm going to talk to a couple of customers here.
See what they say.
This woman says that she fully trusts the safety measures that have been taken and she believes the authorities have controlled the disease very well.
Right now I feel calmer than before because the pork is subject to more controls, and that reassures me when it comes to buying.
In order to be considered free of swine fever, a year has to pass after the last infected animal is eliminated.
As Spain continues with its efforts to contain the virus, its farmers are praying they won't have to wait too long for the export markets to reopen as normal.
Bye, Hedgeco, in Catalonia.
Now, one of the biggest names in Italian luxury is stepping down.
Stefano Gabbana, who co-founded Dolce & Gabbana, is leaving his managerial role, but he will stay on in a creative capacity.
The same time, the company has acknowledged talks with banks are ongoing after previous reports of debt issues.
Chris Lowe is still with me.
Chris, luxury used to be recession-proof almost.
Has that changed?
It has.
And I think the primary thing, and this is certainly the case with Dolce & Gabbana, is the loss of Chinese consumers.
China has been a economic juggernaut for decades, produced more millionaires and billionaires than any other country, up until their property market collapsed.
And that, of course, started about five years ago.
And the money has been drying up ever since.
And that is where now, when the West weakens that backbone of consumer spending from China isn't there anymore to keep things going.
Yeah, it's not the only luxury fashion house that's definitely struggling.
Really interesting.
Now, Chris, do you work from home at all?
Yes, frequently.
You do.
Well, you might be interested in this.
So one of the most famous cricket grounds in London has come up with what it calls the ultimate homeworking experience this summer.
The Surrey County Cricket Club has asked fans who don't have to turn up at the office to come with their laptops to the Oval Cricket Ground.
That's in London.
Here's Steve Elworthy, chief executive at Surrey County, who says people will be given desk access and super fast Wi-Fi with a view of the pitch.
We've invested in, we've put in super high-speed Wi-Fi, we've made areas available, you know, so people can come down, and you know there's thousands of people every day in London that are looking for dedicated workspaces.
And we're saying, come along to the Oval and, you know, it's an option.
The backdrop is just a game of cricket in the background.
Where we've positioned a couple of these terraces.
They're sort of mid-tier, they're a little bit higher up and they're sort of dedicated spaces, so you're not potentially going to have too many spectators around you.
If you've decided you want to sit in the stand and do some work, you're probably not going to take your call there.
You might have to head off. into the concourse in the back and maybe do that.
The oval, there's enough space to find places to go and make a call.
There you go, Chris.
You're going to take your laptop to the oval, or maybe there's another sport you'd like to watch when you're working from home.
Boy, I would love to watch a Yankee game, you know, while working from home.
But have you met American fans?
Yeah, it would be really loud.
Exactly, yeah.
You wouldn't get any work done whatsoever.
I certainly can't work from home anyway.
So there you go.
Chris Lowe, chief economist at FHN Financial in New York, who dreams of working from home for a Yankee game?
And that's it from World Business Report.
I'm Leanna Byrne.
Thanks for listening.
The dramatic stories of the families behind some of the world's biggest companies.
Inheritance, from the BBC World Service.
Season one, Samsung pulls back the curtain on one of South Korea's most prominent families.
They are the equivalent of royalty, a symbol of the nation of South Korea.
Owners of global tech giant Samsung.
There's a succession-style drama underneath of all this.
Listen now.
Search for Inheritance Samsung wherever you get your BBC podcasts.
