Hungary attracts Southeast Asian guest workers in growing numbers

Hungary attracts Southeast Asian guest workers in growing numbers
The are almost 100,000 foreign workers in Hungary and their number is growing despite new immigration rules. / bne IntelliNews
By Tamas Csonka April 16, 2024

An increasing number of workers from third countries, including the Philippines, Vietnam, and Kyrgyzstan, are coming to Hungary to fill open positions, but there is an outflow of workers from regional countries, including Serbia or Ukraine, data from the statistics office KSH show.

Immigration of guest workers from Southeast Asian countries gained momentum last year. The number of Filipino nationals residing in Hungary rose from 1,100 in 2022 to 6,300 last year, a net increase of over 5,000. KSH recorded an increase of 2,200 Vietnamese and 1,300 Kyrgyz workers last year.

Wages in Hungary are lower compared to its regional peers, but are still significantly higher than in these developing countries. This also explains why there is an outflow of workers from Serbia or Romania.

The KSH data showed the number of Ukrainians in the labour market falling by more than 3,600. Presumably, most of these workers left Hungary for a temporary stint to work in the EU.

The number of Ukrainian workers exceeds 20,000, making them the largest group among foreign workers. Currently, more than 7,000 Slovak and Romanian citizens work in Hungary, but their number is also decreasing slightly because Hungary is no longer as attractive a destination for them as before. There are almost no more arrivals from neighbouring countries, as in the last decade Hungary has lost the wage advantage it offered in the competition with the regional countries.

In addition, workers from Central and Eastern Europe are increasingly looking for work in Western Europe.

The number of guest workers in Hungary reached 95,000 in September, up from 82,500 in the same period a year ago.

The government tightened rules on immigration and guest workers in December to win support from voters concerned about the influx of foreign workers. Demand for labour needs to be met by "activating Hungary's workforce reserve and drawing in job-seekers and economically inactive people", according to the regulation, but it notes as well that the number of work permits to foreigners may not exceed the number of open positions.

Analysts said the tightened rules do little to slow the inflow of guest workers as Hungary has a deepening demographic crisis.

The number of open positions is over 80,000 and even the 65,000 quota set for 2024 will not be filled. Last year, 39,000 residency permits for guest workers were issued.

The new regulation also stipulates that in the case of investment projects, guest workers can be employed based on an agreement with the state. As reindustrialization plays an important pillar in Orban’s government economic policy, these licenses are almost always issued.

Critics claim that the arrival of foreign workers is pushing down wages in Hungary. There have been many cases reported that after hiring Asian workers, employers ditched the local workforce.