Economy

Hungary continues to demonstrate economic growth as one of the newest member countries of the European Union (since 2004). The private sector accounts for over 80% of GDP. Hungary gets nearly one third of all foreign direct investment flowing in to Central Europe. Foreign ownership of and investment in Hungarian firms are widespread, with cumulative foreign direct investment totalling more than US$23 billion since 1989. The Hungarian sovereign debt's credit rating is BBB+ as of July 2006, making Hungary the only other country in the EU apart from Poland not to enjoy an A grade score. Inflation and unemployment have been on the rise in the past few years, and they are expected to rise further. Foreign investors' trust in the Hungarian economy has declined, as they deem that the stringency measures planned in the second half of 2006 are not satisfactory, their focus being mainly on increasing the income side rather than curbing government spendings. Economic reform measures such as health care reform, tax reform and local government financing are being addressed by the present government.

The Hungarian government has expressed a desire to adopt the Euro currency in 2010. However, foreign analysts widely criticised that date as highly unrealistic given the current shape of the economy in relation to the Maastricht criteria; their assessments suggest that a date of 2013-2014 for Euro adoption is more realistic. Some analysts even go as far as to suggest that Romania and Bulgaria, who joined the EU in 2007, might beat Hungary to Euro adoption.

Facts and Figures

• GDP:
  • Purchasing power parity: $175.2 billion
  • Official exchange rate): $113.2 billion
  • Real growth rate: 3.9%
  • Per capita (PPP): $17,600
  • Composition by sector:
    • Agriculture: 3.1%
    • Industry: 32.1%
    • Services: 64.8%
• Labour force:
  • Total: 4.2 million
  • By occupation:
    • Agriculture: 5.5%
    • Industry: 33.3%
    • Services: 61.2%
• Unemployment rate: 7.4%
• Population below poverty line: 8.6%
• Household income or consumption by percentage share:
  • Lowest 10%: 4.1%
  • Highest 10%: 22.2%
• Distribution of family income - Gini index: 26.9
• Inflation rate (consumer prices): 3.7%
• Investment (gross fixed): 23.4% of GDP
• Budget:
  • Revenues: $48.73 billion
  • Expenditures: $59.62 billion
• Public debt: 68.6% of GDP
• Agricultural Products:
  • Wheat
  • Corn
  • Sunflower seed
  • Potatoes
  • Sugar beets
  • Pigs
  • Cattle
  • Poultry
  • Dairy products
• Industries:
  • Mining
  • Metallurgy
  • Construction materials
  • Processed foods
  • Textiles
  • Chemicals (especially pharmaceuticals)
  • Motor vehicles
• Industrial production growth rate: 9.5%
• Electricity:
  • Production: 31.83 billion kWh
  • Consumption: 37.1 billion kWh
  • Exports: 6.3 billion kWh
  • Imports: 13.8 billion kWh
• Oil:
  • Production: 47,530 bbl/day
  • Consumption: 132,000 bbl/day
  • Exports: 47,180 bbl/day
  • Imports: 94,000 bbl/day
  • Proved reserves: 110.7 million bbl
• Natural Gas:
  • Production: 2.963 billion cu m
  • Consumption: 14.46 billion cu m
  • Exports: 0 cu m
  • Imports: 11.42 billion cu m
  • Proved reserves: 34.26 billion cu m
• Current account balance: -$8.392 billion
• Exports:
  • Total: $67.99 billion f.o.b.
  • Commodities:
    • Machinery and equipment 61.1%
    • Other manufactures 28.7%
    • Food products 6.5%
    • Raw materials 2%
    • Fuels and electricity 1.6%
  • Partners:
    • Germany 29.5%
    • Italy 5.6%
    • Austria 5%
    • France 5%
    • UK 4.5%
    • Romania 4.2%
    • Poland 4%
• Imports:
  • Total: $69.75 billion f.o.b.
  • Commodities:
    • Machinery and equipment 51.6%
    • Other manufactures 35.7%
    • Fuels and electricity 7.7%
    • Food products 3.1%
    • Raw materials 2.0%
  • Partners:
    • Germany 27.2%
    • Russia 8.4%
    • China 7.1%
    • Austria 6.2%
    • France 4.7%
    • Italy 4.5%
    • Netherlands 4.3%
    • Poland 4.2%
• Reserves of foreign exchange and gold: $21.05 billion
• Debt - external: $107.3 billion
• Economic aid - recipient: $3.4 billion in available EU structural adjustment and cohesion funds (2004-06)
• Currency (code): forint (HUF)