Business Environment in Hungary
Hit by the financial crisis head-on, the country was saved from banckruptcy by the International Monetary Fund. After experiencing a deep recession in 2009, the country returned to a timid growth in 2010, estimated at 0.6% of the GDP and driven essentially by exports.
The newly-formed Orban government announced a 29-point stimulus plan, which aimed to stimulate the economy and reduce the budget deficit, especially through taxing financial institutions (this controversy lead to the premature department of the IMF and the EC). An emergency series of exceptional fiscal and parafiscal measures was also quickly passed, essentially affecting the energy, telecommunications and food distribution sectors.
The economic crisis has worsened the employment situation: according to estimations, in 2010 the unemployment rate increased to 10.8%.
|GDP (billions USD)||129.34e||128.96||133.68e||140.05||147.30e|
|GDP (Constant Prices, Annual % Change)||-6.7||1.2e||2.8||2.8||2.8|
|GDP per Capita (USD)||12,894e||12,879e||13,370||14,029||14,777e|
|General Government Balance (in % of GDP)||-0.9||-3.1e||-4.3||-3.7e||-3.3e|
|Inflation Rate (%)||4.2||4.9||4.1||3.5e||3.0e|
|Unemployment Rate (% of the Labor Force)||10.1||11.2e||11.5e||10.9||10.7|
|Current Account (billions USD)||0.52||-0.63||-1.55e||-3.40e||-|
|Current Account (in % of GDP)||0.4||-0.4||-1.0e||-2.1||-|
Source: IMF - World Economic Outlook Database
Note: (e) Estimated Data
Main Sectors of Industry
The agricultural sector, which was predominant in the country's economy for many years, now only represents slightly less than 4.5% of the GDP and employs about 4% of the active population. The main crops are cereals, fruits, vegetables and wine.
The industrial sector contributes to one-third of the country’s GDP and is very open to foreign investors. Automobile and electronics sectors are the two main sectors given that they account for 30% of the country's exports and generate 15% of the GDP.
The services sector contributes nearly to two-thirds of the GDP.The global financial crisis had detrimantal effects on Hungarian industries that work on the external market but also on the national market where demand was reduced.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||4.5||32.1||63.3|
|Value Added (in % of GDP)||4.3||29.4||66.2|
|Value Added (Annual % Change)||50.6||-0.8||-1.4|
Source: World Bank - Last Available Data.
|Hungarian Forint (HUF) - Average Annual Exchange Rate For 1 USD||199.58||210.39||183.63||172.11||202.34|
Source: World Bank
Indicator of Economic Freedom
- Moderately free
- World Rank:
- Regional Rank:
Foreign Trade in Figures
The Hungarian economy is very open, trade representing roughly 160% of the GDP.
The trade balance is traditionally a deficit. However, as an effect of the global recession, the volume of trade has decreased and due to the fall in imports being quicker than the increase in exports, the trade balance became positive.
The European Union is by far Hungary's biggest economic partner (Germany and Russia in the lead), followed by China.
|Foreign Trade Indicators||2006||2007||2008||2009||2010|
|Imports of Goods (million USD)||78,262||95,565||108,940||77,761||88,125|
|Exports of Goods (million USD)||75,255||95,400||108,504||83,008||95,484|
|Imports of Services (million USD)||11,910||15,544||18,541||16,331||15,529|
|Exports of Services (million USD)||13,567||17,091||20,018||18,285||18,386|
|Imports of Goods and Services (Annual % Change)||14.8||13.4||4.7||-||-|
|Exports of Goods and Services (Annual % Change)||18.6||16.4||4.8||-||-|
|Imports of Goods and Services (in % of GDP)||77.8||78.8||80.2||-||-|
|Exports of Goods and Services (in % of GDP)||77.1||80.4||81.4||-||-|
|Trade Balance (million USD)||-2,572||277||-53||5,678||-|
|Trade Balance (Including Service) (million USD)||-1,003||1,711||1,233||-||-|
|Foreign Trade (in % of GDP)||154.9||159.1||161.7||-||-|
Source: WTO - World Trade Organization ; World Bank
Main Partner Countries
(% of Exports)
|Other partnersClose extended list||53.3%|
(% of Imports)
|Other partnersClose extended list||49.0%|
Sources of General Economic Information
Ministry of Agriculture and Regional Development
Ministry of Economy
CIA World Factbook
- Statistical Office
Hungarian Statistics Office
- Central Bank
Magyar Nemzetti Bank
- Stock Exchange
Budapesti ÉrtéktÅ?zsde / Budapest Stock Exchange
- Search Engines
- Economic Portals
Napi Gazdaság - only in Hungarian
Heti Világgazdaság - only in Hungarian
Budapest Business Journal - in English
Piac és Profit - only in Hungarian
- Executive Power
- Chief of state: Laszlo SOLYOM (since 5 August 2005).
Head of government: Prime Minister Gordon BAJNAI (since April 2009).
Cabinet: Council of Ministers prime minister elected by the National Assembly on the recommendation of the president; other ministers proposed by the prime minister and appointed and relieved of their duties by the president elections: president elected by the National Assembly for a five-year term (eligible for a second term); election last held 6-7 June 2005 (next to be held by June 2010); Prime minister elected by the National Assembly on the recommendation of the president; last election held in April 2009.
- Legislative Power
- Unicameral National Assembly or Orszaggyules (386 seats; members are elected by popular vote under a system of proportional and direct representation to serve four-year terms).
Elections: last held 9 and 23 April 2006 (next to be held in April 2010).
- Main Political Parties
SZDSZ :Alliance of Free Democrats or SzDSz;
KDNP : Christian Democratic People's Party or KDNP;
FIDESZ :Hungarian Civic Alliance or Fidesz;
MDF : Hungarian Democratic Forum or MDF;
MSZP : Hungarian Socialist Party or MSz.
- Current Political Leaders
- President: Pál Schmitt (since june 2010) - Fidesz
Prime Minister: Viktor Orbán (since Mai 2010) - Fidesz
- Next Election Dates
- Presidential: June 2014
National Assembly: April 2014
Indicator of Freedom of the Press
- World Rank:
- 3 places down compared to 2008
Indicator of Political Freedom
- Political Freedom:
- Civil Liberties:
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Thanks largely to the export rebound in early 2011, the Hungarian economy saw slightly faster growth of 1.7% last year.
Hong Kong Trade Development Council (HKTDC) on 30 Jul 2012 related to Business Environment in Hungary
2012 Country Commercial Guide for U.S. Companies doing business in Hungary.
U.S. Commercial Service on 14 Mar 2012 related to Business Environment in Hungary
Hungary has a population with a fairly even distribution of different age groups. While children and teenagers aged 14 or below and elderly people aged 65 or above account for nearly one-third of the population, the majority of Hungarians fall into the age group between 15-64
Hong Kong Trade Development Council (HKTDC) on 26 Apr 2011 related to Business Environment in Hungary
•The rebound of the export-dependent industry sector in early 2011 accelerated the growth of the Hungarian economy to 1.4% last year.
Hong Kong Trade Development Council (HKTDC) on 28 Feb 2012 related to Business Environment in Hungary
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