Hungary Economy 1997

Economy - overview Hungary probably had the most Western-oriented economy in East Europebefore the transition to a market system began in 1990, and Budapest madegood progress in the initial years of transition. The reform process slowedin 1993-94, however, in part because of the May 1994 elections and the resultingchange in government. By 1994 the privatization of state firms had groundto a halt, while both the budget and current account deficits soared to unsustainablelevels - about 8% and 10% of GDP, respectively. The situation improved sharplyin 1995: an austerity program introduced in March reduced both deficits; anda renewed privatization effort later in the year resulted in more than $3billion worth of sales of state firms to foreign investors - money used mostlyto reduce Hungary's large foreign debt. Real GDP increased 2.9% in 1994 -following several years of steep decline - and about 1.5% in 1995 and only0.5% in 1996. Unemployment reached 14% in early 1993 before gradually fallingback to 11% in 1996. Inflation has oscillated; it reached 40% in mid-1991,dropped to 17% in early 1994, jumped back to 31% by mid-1995, and settledat 20% in 1996. Prospects for 1997 and 1998 are good compared with the situationearlier. Most forecasters expect 2% to 3% GDP growth in 1997 and slightlyhigher growth in 1998. Inflation and unemployment are edging down. With thegovernment still committed to reform, both the budget and current accountdeficits are at IMF target levels - about 4% of GDP. Budapest also is makinggood progress in restructuring the pension, health, tax, education, and othersystems as part of the effort to decrease the role of government. This dramaticshift in economic policy was rewarded in 1996 by the IMF, which finally signedthe standby agreement Budapest had sought, and by the OECD, which welcomedHungary as a member.

GDP purchasing power parity - $74.7 billion (1996 est.)

GDP - real growth rate 0.5% (1996 est.)

GDP - per capita purchasing power parity - $7,500 (1996 est.)

GDP - composition by sector
agriculture: 7.3%
industry : 31.9%
services: 60.8% (1994)

Inflation rate - consumer price index 20% (1996 est.)

Labor force
total: 6.2 million (1996)
by occupation: services 58.7%, industry 34.7%, agriculture 6.6 (1996 est.)

Unemployment rate 11% (1996 est.)

Budget
revenues: $10.2 billion
expenditures : $11 billion, including capital expenditures of $NA (1995)

Industries mining, metallurgy, construction materials, processed foods, textiles,chemicals (especially pharmaceuticals), motor vehicles

Industrial production growth rate 2% (1996 est.)

Electricity - capacity 6.98 million kW (1994)

Electricity - production 31.63 billion kWh (1994)

Electricity - consumption per capita 3,200 kWh (1995 est.)

Agriculture - products wheat, corn, sunflower seed, potatoes, sugar beets; pigs, cattle, poultry,dairy products

Exports
total value: $14.2 billion (f.o.b., 1996)
commodities: raw materials 39.5%, consumer goods 25.0%, agriculture and food products21.8%, machinery and equipment 11.3%, fuels and electricity 2.4% (1995)
partners : EU 63.3% (Germany 28.8%, Austria 10.0%), Eastern Europe 19.7%, Russia10.7% (1995)

Imports
total value : $16.8 billion (f.o.b., 1996)
commodities: raw materials 42.3%, consumer goods 20.9%, machinery and equipment 20.1%,fuels and electricity 10.8%, agricultural and food products 5.9% (1995)
partners: EU 61.6% (Germany 23.6%, Austria 11.9%), Eastern Europe 22.2%, Russia14.7% (1995)

Debt - external $27.5 billion (1996 est.)

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 - 166.100 (January 1997), 152.647 (1996), 125.681 (1995),105.160(1994), 91.933 (1993), 78.988 (1992)

Fiscal year calendar year

NOTE: The information regarding Hungary on this page is re-published from the 1997 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Hungary Economy 1997 information contained here. All suggestions for corrections of any errors about Hungary Economy 1997 should be addressed to the CIA.