Hungary Economy Profile 2008

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 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.

GDP (purchasing power parity)

$194.2 billion (2007 est.)

GDP (official exchange rate)

$136.4 billion (2007 est.)

GDP - real growth rate

2.1% (2007 est.)

GDP - per capita (PPP)

$19,500 (2007 est.)

GDP - composition by sector

agriculture: 3.3%
industry: 32.4%
services: 64.2% (2007 est.)

Population below poverty line

8.6% (1993 est.)

Household income or consumption by percentage share

lowest 10%: 4%
highest 10%: 22.2% (2002)

Inflation rate (consumer prices)

7.8% (2007 est.)

Investment (gross fixed)

21.9% of GDP (2007 est.)

Labor force

4.19 million (2007 est.)

Labor force - by occupation

agriculture: 5.5%
industry: 33.3%
services: 61.2% (2003)

Unemployment rate

7.1% (2007 est.)

Distribution of family income - Gini index

28 (2005)

Budget

revenues: $62.25 billion
expenditures: $69.98 billion (2007 est.)

Public debt

70.2% of GDP (2007 est.)

Industries

mining, metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), motor vehicles

Industrial production growth rate

5% (2007 est.)

Electricity - production

33.69 billion kWh (2005)

Electricity - consumption

35.98 billion kWh (2005)

Electricity - exports

9.41 billion kWh (2005)

Electricity - imports

15.64 billion kWh (2005)

Oil - production

42,180 bbl/day (2005 est.)

Oil - consumption

152,200 bbl/day (2005 est.)

Oil - imports

150,000 bbl/day (2004)

Oil - exports

58,380 bbl/day (2004)

Oil - proved reserves

102.5 million bbl (1 January 2006 est.)

Natural gas - production

2.904 billion cu m (2005 est.)

Natural gas - consumption

14.37 billion cu m (2005 est.)

Natural gas - exports

0 cu m (2005 est.)

Natural gas - imports

11.51 billion cu m (2005)

Natural gas - proved reserves

32.86 billion cu m (1 January 2006 est.)

Current Account Balance

-$6.681 billion (2007 est.)

Agriculture - products

wheat, corn, sunflower seed, potatoes, sugar beets; pigs, cattle, poultry, dairy products

Exports

$85.73 billion f.o.b. (2007 est.)

Exports - commodities

machinery and equipment 61.1%, other manufactures 28.7%, food products 6.5%, raw materials 2%, fuels and electricity 1.6% (2003)

Exports - partners

Germany 29.5%, Italy 5.6%, France 5%, Austria 5%, UK 4.5%, Romania 4.2%, Poland 4.1% (2006)

Imports

$85.99 billion f.o.b. (2007 est.)

Imports - commodities

machinery and equipment 51.6%, other manufactures 35.7%, fuels and electricity 7.7%, food products 3.1%, raw materials 2.0% (2003)

Imports - partners

Germany 27.1%, Russia 8.2%, China 6.9%, Austria 6.2%, France 4.7%, Italy 4.6%, Netherlands 4.3%, Poland 4.3% (2006)

Reserves of foreign exchange and gold

$24.25 billion (31 December 2007 est.)

Debt - external

$142.9 billion (30 June 2007)

Stock of direct foreign investment - at home

$96.61 billion (2006 est.)

Stock of direct foreign investment - abroad

$36.24 billion (2006 est.)

Market value of publicly traded shares

$41.93 billion (2006)

Economic aid - recipient

$302.6 million (2004)

Currency (code)

forint (HUF)

Exchange rates

forints per US dollar - 186.16 (2007), 210.39 (2006), 199.58 (2005), 202.75 (2004), 224.31 (2003)

Fiscal year

calendar year