hungary economic overview hristo georgiev dilyan dimitrov

Hungary

Economic Overview

Hristo Georgiev

Dilyan Dimitrov

Hungary – Basic Data

Size area: 93,030 km2;Population: 10.038m (Mar 2008 est.);Population growth: -0.2% (average, 2004-2007); Government type: Parliamentary democracy; Currency: Hungarian forint (HUF)

Recent Economic History

Transition to democracy and open market economy After fall of the communist regime structural reforms

and stabilization measures in the 1990’s Deterioration of the macroeconomic performance and

new reforms in the banking and public sectors in the mid-1990’s

Strong economic performance after the reforms Since 2001 shift from structural reforms to rebalancing

the living standards and upgrading of the public infrastructure

GDP GDP – $ 138 billion (2007) Composition by sectorsagriculture: 3.3% industry: 32.4% services: 64.2% (2007 est.).

GDP per capita - $ 13,745

GDP Growth Rate

Labor Market

Population - approx. 10 million Employed – 3,9 million Employment rate – 57% Employment by sectors:agriculture: 6.2% industry: 27.1% services: 66.7%

Gross monthly average salary:185,000 HUF (approx. 740 EUR)

Unemployment – 9.1% (Feb. 2009)

Unemployment Rate

International Trade

Exports: $109.3 billion f.o.b. (2008 est.)

machinery and equipment 61.1%other manufactures 28.7%food products 6.5%

raw materials 2%fuels and electricity 1.6% (2003)

Export Partners: Germany 28.1%, Italy 5.6%, France 4.7%, Austria 4.6%, Romania 4.5%, UK 4.5%, Slovakia 4.2%, Poland 4.2% (2007)

International Trade

Imports:$107.5 billion f.o.b. (2008 est.)

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

Import partners:Germany 26.6%, China 7.8%, Russia 6.9%, Austria 6.1%, Italy 4.5%, France 4.3%, Netherlands 4.3% (2007)

Current Account Balance

Current Account Balance

Inflation

Effects of Crisis on Hungary

Decline in economic growth Tightened credit conditions and fiscal policy

Effects of Crisis on Hungary

Key indicators 2008 2009 2010 2011 2012 2013

Real GDP growth (%) 0.5 -4.5 0.4 2.7 3.6 3.5

Consumer price inflation (av; %) 6.1 3.0 2.7 2.5 2.3 2.1

Consumer price inflation (year-end; %) 3.7 3.0 2.6 2.4 2.2 2.0

Budget balance (% of GDP) -3.4 -2.9 -2.8 -2.5 -2.5 -2.2

Current-account balance (% of GDP) -5.8 -3.5 -3.8 -4.2 -3.9 -3.6

Short-term deposit rate (av; %) 8.1 8.0 7.3 6.8 6.3 5.8

Exchange rate Ft:US$ (av) 172.1 209.7 200.7 191.5 182.4 176.2

Exchange rate Ft:€(av) 251.5 280.0 278.0 271.0 264.0 259.0

Monetary and Fiscal Policy

IMF package of $25bn given in portions Planned tightening of fiscal policy IMF is concerned that Hungary is not committed

enough to reform

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