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Hungary
 

Country
GDP per Capita: $4,686 GDP (USD Billions): 47.8 GDP Growth Rate: 5.9% External Debt as a % of GDP: 56% Inflation (CPI): 9.6 Currency: 1 Forint (HUF)=100 Filler USD Conversion Rate: 1USD=265.97HUF Population (Millions): 10.2 Population Growth Rate: (0.3)% Labor Force (Millions): 4.2 % Growth in Labor Force: 0.4% Unemployment: 9.4% Language: Hungarian Major Industries: mining, metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), motor vehicles Political System: Republic Economic System: Free Market Literacy Rate: 99% President: Arpand Goncz/Prime Minister: Viktor Orban Capital: Budapest Facts: Candidate country for the first round of the EU admission

Hungary

Hungary has consolidated its March 1995 stabilization program and undergone enough restructuring to become an established market economy. The country appears to have entered a period of sustainable growth, gradually falling inflation, and stable external balances. The government's main economic priorities are to complete structural reforms, particularly the implementation of the 1997 pension reform act (the first in the region), taxation reform, and planning for comprehensive health care, local government finance reform, and the reform of education at all levels. Foreign investment has totaled more than $17 billion through 1998. In recognition of Hungary's improved macroeconomic situation, all major credit-rating agencies listed the country's foreign currency debt issuances as investment grade in 1996. The current IMF stand-by arrangement expired in February 1998, and Budapest and the IMF agree that there is no need to renew it. The OECD welcomed Hungary as a member in May 1996, and in December 1997 the EU invited Hungary to begin the accession process. Forecasters expect 4%-5% growth in 1999. SOURCE: CIA FACTBOOK

Comment:

Considered by many to be the most reformed of the transition countries, Hungary's unified political goal of EU membership greatly influences its policies, reforms and economic tasks. Hungary leads the region in (FDI) foreign direct investment (about 1/3 of all FDI in Central and Eastern Europe including Russia) which accounts for a majority of the countries growth. Some of the big names include - Audi, Volkswagen, General Electric, IBM, Suzuki, Phillip of the Netherlands, General Motors, Ford, PepsiCo, Coca-Cola, Alcoa, U.S. West and Ameritech. 70% of Hungary's exports are produced by foreign owned companies; therefore the government is looking to expand the small and medium sized enterprise sector which has failed to take the role of supplier to the big multinationals. Some of the principal sectors the government emphasises for substantial growth are: Telecommunications/IT, Services (financial, advertising, retailing), Food Processing, and infrastructure expansion within the Transportation (motorways, railways, air) and Energy sectors.