Economy
Economic overview:
Hungary, probably the most Western-oriented economy in East Europe before the transition to a market system began in 1990, made good progress in the initial years of transition. The reform process slowed in 1993-94, however, in part because of the May 1994 elections and the resulting change in government. By 1994 the privatization of state firms had ground to a halt, while both the budget and current account deficits soared to unsustainable levels - about 8% and 10% of GDP, respectively. The situation improved sharply in 1995; an austerity program introduced in March reduced both deficits, and a renewed privatization effort later in 1995 resulted in more than $3 billion worth of sales of state firms to foreign investors - money that will be used to reduce Hungary's large foreign debt. As for other macroeconomic developments, real GDP increased 2.9% in 1994 - following several years of steep decline - and about 1.5% in 1995. Unemployment reached 14% in early 1993 before gradually falling back to 10% in 1995. Inflation has oscillated; it reached 40% in mid-1991, dropped to 17% in early 1994, and then jumped back to 31% by mid-1995. Prospects for 1996 are good. With the government still committed to austerity, both the budget and current account deficits should fall to about 4% of GDP. Economic growth is expected to be about 2% and unemployment at about 10%, with inflation falling to 20% by yearend. In March 1996 the IMF signed a new standby loan agreement with Budapest, and the OECD approved Hungary's application for admission.
GDP:
purchasing power parity - $72.5 billion (1995 est.)
GDP real growth rate:
1.5% (1995)
GDP per capita:
$7,000 (1995 est.)
GDP composition by sector:
agriculture:
7.3%
industry:
37.5%
services:
55.2%
Inflation rate (consumer prices):
28.3% (1995)
Labor force:
4.8 million (1995)
by occupation:
services, trade, government, and other 47.2%, industry 29.7%, agriculture 16.1%, construction 7.0% (1991)
Unemployment rate:
10.4% (yearend 1995)
Budget:
revenues:
$12.6 billion
expenditures:
$13.8 billion, including capital expenditures of $NA (1995)
Industries:
mining, metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), motor vehicles
Industrial production growth rate:
6% (1995 est.)
Electricity:
capacity:
6,740,000 kW
production:
31 billion kWh
consumption per capita:
3,012 kWh (1993)
Agriculture:
wheat, corn, sunflower seed, potatoes, sugar beets; pigs, cattle, poultry, dairy products
Illicit drugs:
major transshipment point for Southwest Asian heroin and transit point for South American cocaine destined for Western Europe; limited producer of precursor chemicals
Exports:
$13 billion (f.o.b., 1995 est.)
commodities:
raw materials and semi-finished goods 36.4%, consumer goods 26.7%, food and agriculture 20.5%, capital goods 13.1%, fuels and energy 3.3% (1994)
partners:
Germany 28.2%, Austria 10.9%, Italy 8.5%, Russia 7.5%, US 4.0% (1994)
Imports:
$15 billion (f.o.b., 1995 est.)
commodities:
fuels and energy 11.0%, raw materials and semi-finished goods 36.9%, capital goods 23.3%, consumer goods 22.0%, food and agriculture 6.8% (1994)
partners:
Germany 23.4%, Austria 12.0%, Russia 12.0%, Italy 7.0%, UK 4.0% (1994)
External debt:
$32.7 billion (October 1995)
Economic aid:
recipient:
ODA, $136 million (1993)
note:
assistance received from OECD countries and international organizations, $3,700 million (1990-93)
Currency:
1 forint (Ft) = 100 filler
Exchange rates:
forints per US$1 - 144 (January 1996), 125.681 (1995),105.160 (1994), 91.933 (1993), 78.988 (1992), 74.735 (1991)
Fiscal year:
calendar year
