US investors in Hungary are expecting a more predictable policy environment following the election victory of centre-right opposition leader Peter Magyar over Prime Minister Viktor Orban.
The outcome has raised hopes of reduced policy volatility after years marked by sudden legal changes and ad hoc government measures.
The American Chamber of Commerce in Hungary, one of the country’s largest foreign investor groups, represents more than 300 US and European companies.
Its members include major global firms such as BlackRock, Cargill, Citi, IBM, Mastercard, Microsoft, and Novartis, among others.
Magyar secured a landslide victory in the April 12 election on a pledge to steer Hungary back towards a pro-European path.
He also aims to unlock billions of euros in frozen European Union funding to revive an economy that has seen years of near-stagnation.
He is expected to take the oath of office on May 9 during the inaugural parliamentary session.
Rule of law seen as critical for investors
Foreign investors are now looking for a stable business environment anchored in the rule of law after Orban’s 16-year tenure.
During this period, Hungary frequently clashed with Brussels over reforms that critics said weakened democratic checks and balances.
Akos Janza, president of AmCham Hungary, highlighted investor concerns about policy unpredictability.
“Capital hates one thing more than tax, and that is unpredictability,” Janza said in an interview, as cited in Reuters report.
Janza added that Magyar’s proposal to move Hungary towards adopting the euro could enhance the country’s attractiveness for foreign investors.
He noted that such a shift could reduce exchange rate volatility and lower administrative costs for businesses.
Policy unpredictability weighed on ratings outlook
Under Orban, the government often used its strong parliamentary majority to centralise power and pass major legislation quickly, sometimes without consultation.
Companies were also subject to sector-specific taxes aimed at funding populist measures.
This environment affected Hungary’s credit outlook.
S&P Global downgraded Hungary’s outlook to negative from stable last April, citing reduced policy predictability, weaker institutional checks, and concerns over judicial independence
Reports from Reuters inidcate that the agency pointed to frequent revisions in budget targets and deviations from stated policy goals, including debt reduction.
Market response and reform expectations
Janza suggested that early market signals have been positive following Magyar’s victory.
He pointed to gains in the Hungarian forint, which reached four-year highs after the election result.
He also indicated support for Magyar’s planned anti-corruption drive, which could attract investors who had previously remained cautious.
In addition, Janza said the business group “absolutely supported” the proposal to establish standalone ministries for healthcare and education.
Overall, investors are closely watching whether the new government can deliver on promises of stability, transparency, and closer alignment with European norms.
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