Business
The value of the Hungarian forint has been declining against the euro for years. In five years it has lost a quarter of its value. The weakness of the forint means the strength of the euro. Around five years ago, one euro was around 300 forints, now it’s around 400.
Compared to Austria, Hungary has always been a cheap shopping country. Visits to dental clinics or beauty salons are also popular with Austrians, such as in Sopron near the Burgenland border. This trend should be strengthened by the weak forint.
Exchange rate has to be right
There is a catch: If you pay in euros, you have to rely on the correct exchange rate and the euro price being adjusted accordingly. Apparently that doesn’t always happen, as a local inspection by ORF Burgenland in Hungary shows. Harald Mairitsch from Neufeld says: “We always pay 25 euros for a manicure, no matter what the price is. And the performance is always the same.”
Changing your euros to forints may be a hassle, but it can be financially rewarding. The WIFO economist Anna Burton advises asking for the price in euros and forints “and then deciding for yourself in which currency I want to pay. Depends on the exchange rate I can avail. Maybe I have already changed money and have cash or I pay with the card and then see the rate that is offered to me straight away.”
Hungary as a holiday destination: unbeatable in terms of price
Shopping is one aspect, going on vacation and traveling is another. As a holiday destination, Hungary is currently unbeatable in terms of price – this is shown by a recent survey by Bank Austria. 100 euros are worth a whopping 180 euros in Hungary. This makes Hungary significantly cheaper than Turkey or Croatia. On the other hand, holidays in Great Britain, the USA and especially in Switzerland are more expensive than in Austria. Here, 100 euros are actually only worth 70 euros.
Hungary even more dependent on Russia
In Hungary it’s the other way around – a trend amplified by Russia’s war against Ukraine. Hungary is even more dependent on Russian gas and oil, Burton explains. Due to this uncertainty, Hungary is also less secure as a business location, explains the economist. The situation for Hungarians who work in Austria and live in Hungary has a positive side: Their salary in euros has increased in their home country due to the devaluation of the forint.