The economic environment of the CEE media markets in 2022

The economies of the Central and Eastern European countries just barely recovered from the effects of the pandemic, when on 24th February Russia invaded Ukraine, causing serious shakeup in the region, hurting Ukraine the most, in tragic ways.

Ukraine lost between 6 to 9 million permanent residents, equalling approximately 18-20% of the population, who mostly found refuge in neighbouring countries. The country managed to avoid a default, but its currency, the Ukrainian hryvnia weakened significantly. The Russian offensive have targeted the energy infrastructure amongst others, leading to a significant deficit of electricity in Ukraine and uncertainty of energy supply in other countries, also prompting them to seek out alternative sources. Central Eastern European media markets faced the effects of the overall shaken sense of safety, alarmingly increasing energy prices, supply chain disruptions and product shortages, increased defensive activities and budget etc. This resulted in (sometimes even record) inflation, mostly affecting the Baltic states and Hungary. High inflation erodes wage purchasing power, resulting in a decline in living standards. Corporate earnings also decline, impacting marketing spendings too. Entire product categories have disappeared from the consumption of Hungarian families. Increasing costs caused increasing prices, so price inflation also appeared in the media markets – in this case, driving investments to grow. In fact, most CEE media markets experienced significant growth (over 10%), except the Ukrainian market and the Hungarian one, which stagnated when calculating in its own currency, but due to the weakening of Forint, this turns into decrease when exchanged to Euro.