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CONSULTING

Last update: 1.07.2009

HUNGARY

GENERAL DATA

Area: 93,030 sq. km
Capital city: Budapest (pop. 2 mln)
Population: 9,956,108 (July 2007 est.)
Annual growth rate: -0.254% (2008 est.)
Languages: Hungarian 98.2%, other 1.8%
Literacy: 99.4%
Government type: Unicameral Parliamentary Democracy
Neighboring countries: Austria, Slovakia, Ukraine, Romania, Serbia, Croatia, Slovenia
Memberships: Australia Group, BIS, Group (AG), BACEE, CEE, CEFTA, CE, CEI, CERN, EAPC, ECE, EU, FAO, IBRD, IDA, IEA, IFC, ILO, IMF, IMO, Inmarsat, ISO, Interpol, IOC, NAM (guest), NATO, NEA, NSG, OAS (observer), OECD, OSCE, PfP, UN, WEU (associate), WHO, WIPO, WMO, WTO
Currency: Forint (HUF)

TARGET SECTORS

• Electronics & Electrical
• Telecommunications
• Chemicals & Pharmaceuticals
• Oil & Gas
• Agriculture
• Food & Beverages
• Heavy machinery
• Property
• Textiles & Leather
• Trade & Commerce
• Transport
• Other Services
• Tourism & Travel


ECONOMY

GDP: approx. $163.9 billion
Annual growth rate: 1.8% (2008 est.)
GDP (PPP): US$190.1bn (2007)
GDP per capita (PPP): US$ $16,400. (2008)
GDP - composition by sector: agriculture: 2.8%, industry: 31.5%, services: 65.8% (2007 est.)
Major Industries: metallurgy, machinery, vehicles, construction materials, logistics, chemicals, precision and measuring equipment, computer products, medical instruments, pharmaceuticals, textiles, processed foods, business services centres
Inflation: 8.0% (2007)
Unemployment: 7.4% (2007)
Labour force - by occupation: 4.19 million (2007 est.): agriculture: 5.5%, industry: 33.3%, services: 61.2%
Trade (2008): Exports ($95,0 billion)
Imports ($94,9 billion)
Stock FDI: $108.6 billion (2007 est.)
Stock FDI abroad: $45.54 billion (2007 est.)

Hungary has made the transition from a centrally planned to a market economy, with a per capita income nearly two-thirds that of the EU-25 average. The private sector accounts for more than 80% of GDP. Foreign ownership of and investment in Hungarian firms are widespread, with cumulative foreign direct investment totaling more than $60 billion since 1989. Hungary issues investment-grade sovereign debt. International observers, however, have expressed concerns over Hungary's fiscal and current account deficits. In 2007, Hungary eliminated a trade deficit that had persisted for several years. Inflation declined from 14% in 1998 to a low of 3.7% in 2006, but jumped to 7.8% in 2007. Unemployment has persisted above 6%. Hungary's labor force participation rate of 57% is one of the lowest in the Organization for Economic Cooperation and Development (OECD). Germany is by far Hungary's largest economic partner. Policy challenges include cutting the public sector deficit to 4% of GDP by 2008, from about 6% in 2007. The government's austerity program of tax hikes and subsidy cuts has reduced Hungary's large budget deficit, but the reforms have dampened domestic consumption, slowing GDP growth to about 2% in 2007. The government will need to pass additional reforms to ensure the long-term stability of public finances. The government plans to eventually lower its public sector deficit to below 3% of GDP to adopt the euro.

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