Background
Hungary became a Christian kingdom in A.D. 1000 and for many centuries served as a bulwark against Ottoman Turkish expansion in Europe. The kingdom eventually became part of the polyglot Austro-Hungarian Empire, which collapsed during World War I. The country fell under Communist rule following World War II. In 1956, a revolt and an announced withdrawal from the Warsaw Pact were met with a massive military intervention by Moscow. Under the leadership of Janos KADAR in 1968, Hungary began liberalizing its economy, introducing so-called "Goulash Communism." Hungary held its first multiparty elections in 1990 and initiated a free market economy. The Republic of Hungary, is a landlocked country in central Europe covering an area of 93,030 sq km (slightly smaller than Indiana) with a population of approximately 10 million people. The capital is Budapest. It is a member of OECD, NATO, was admitted to the EU in 2004 and is scheduled to join the Euro zone in 2012-2013.
Economy - Overview
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 is widespread, with cumulative foreign direct investment totaling more than $60 billion since 1989. The government's IMF-mandated austerity measures, imposed since late 2006, have reduced the budget deficit from over 9% of GDP in 2006 to 3.3% in 2008. Hungary's impending inability to service its short-term debt - brought on by the global credit crunch in late 2008 - led Budapest to seek and receive an IMF-arranged financial assistance package worth over $25 billion. The global financial crisis, declining exports, and low domestic consumption and fixed asset accumulation, dampened by government austerity measures, will result in a negative growth rate of about -1.5% to -2.5% in 2009.
GDP (purchasing power parity):
$205.7 billion (2008 est.)
-1.5% (2008 est.)
4.2 million (2008 est.)
agriculture: 5% industry: 32.4% services: 62.6% (2005)
8% (2008 est.)
Inflation rate (consumer prices):
6.1% (2008 est.)
wheat, corn, sunflower seed, potatoes, sugar beets; pigs, cattle, poultry, dairy products
mining, metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), motor vehicles
forints (HUF) per US dollar - 171.8 (2008), 183.83 (2007), 210.39 (2006), 199.58 (2005), 202.75 (2004)
