With Hungary's economic and legal outlook plugged into global uncertainties and no shortage of those, two market sectors still stand out in terms of potential – energy and agriculture – according to HP Legal Partner Laszlo Hajdu, who, looking at the fundamentals, shares an optimistic view of the country's future.
"The global economic landscape this year seems to be predominantly influenced by three major factors: the ongoing war in Ukraine, tensions in the Middle East, and the upcoming US elections," Hajdu begins. "These events are pivotal and their developments are crucial to monitor as they hold significant sway over the global economy, and, consequently, our country."
Focusing on Hungary, Hajdu says that he is "quite optimistic" about its market. "Specifically, two sectors show great potential – energy and agriculture. There’s a positive momentum in the energy sector, particularly with the introduction of important legislation aimed at boosting renewables like wind projects and energy storage projects," he explains. "This shift is largely a strategic move to reduce our dependency on Russian energy." Moreover, he is of the view that "this is a positive direction and reflects the government's proactive approach to diversifying energy sources." Additionally, he says that, in the agriculture sector, "there are several promising green-field development projects in the pipeline, which indicates a healthy level of activity in this sector."
In terms of the Hungarian M&A mid-market, Hajdu does not expect significant growth in the number of transactions compared to 2023, because yield expectations are still too high. Therefore, he says, "there is a notable trend of Hungarian businesses expanding abroad."
Hajdu then reports that the banking and finance sector in Hungary is closely aligning itself with the developments in the energy and agriculture sectors. "There are already several financing deals in the pipeline," he says. "The direction looks promising, especially with the government's support. The national bank's decisions on interest rates will also play a crucial role in enhancing lending activity."
Hajdu also highlights a particular legislative movement: "One notable aspect is the introduction of government pre-emption rights on certain transactions," he says. "This has been viewed differently by market players; some see it as a major obstacle, while others don't perceive it as a significant hindrance," he explains.
Ultimately, Hajdu adds that he expects the "legal sector in Hungary is likely to remain stable, similar to last year. Despite macroeconomic challenges, this year could be a period of consolidation. The struggles of last year are likely to stabilize, which should be beneficial for the legal market overall."