Economy Overview:

    Since 1989 Hungary has been a leader in the transition from a socialist
    command economy to a market economy - thanks in large part to its initial
    economic reforms during the Communist era. The private sector now accounts
    for about 55% of GDP. Nonetheless, the transformation is proving difficult,
    and many citizens say life was better under the old system. On the bright
    side, the four-year decline in output finally ended in 1994, as real GDP
    increased an estimated 3%. This growth helped reduce unemployment to just
    over 10% by yearend, down from a peak of 13%. However, no progress was made
    against inflation, which remained stuck at about 20%, and the already-large
    current account deficit in the balance of payments actually got worse,
    reaching almost $4 billion. Underlying Hungary's other economic problems is
    the large budget deficit, which probably exceeded 7% of GDP in 1994, despite
    some late-year budget cutting by the new leftist government. In 1995 the
    government has pledged to accelerate privatization and lower the budget
    deficit to 5.5% of GDP. It believes this fiscal tightening will reduce the
    current account deficit to $2.5 billion but at the cost of holding economic
    growth to only 1%.


National product:
    GDP - purchasing power parity - $58.8 billion (1994 est.)
National product real growth rate:
    3% (1994 est.)
National product per capita:
    $5,700 (1994 est.)
Inflation rate (consumer prices):
    21% (1994)
Unemployment rate:
    10.4% (yearend 1994)
Budget:
  revenues:
    $11.3 billion
  expenditures:
    $14.2 billion, including capital expenditures of $NA (1994)



Industrial production:

    growth rate 7% (1994 est.)
Electricity:
  capacity:
    6,740,000 kW


  production:
    31 billion kWh
  consumption per capita:
    3,012 kWh (1993)


Economic Activity

Industries:

    mining, metallurgy, construction materials, processed foods, textiles,
    chemicals (especially pharmaceuticals), buses, automobiles
Agriculture:
    including forestry, accounts for 15% of GDP and 16% of employment; highly
    diversified crop and livestock farming; principal crops - wheat, corn,
    sunflowers, potatoes, sugar beets; livestock - hogs, cattle, poultry, dairy
    products; self-sufficient in food output

Exports:

    $10.3 billion (f.o.b., 1994 est.)
  Commodities:
    raw materials and semi-finished goods 30.0%, machinery and transport
    equipment 20.1%, consumer goods 25.2%, food and agriculture 21.4%, fuels and
    energy 3.4% (1993)
   Major Trade Partners::
    Germany 25.3%, Italy 8.3%, Austria 10.5%, the FSU 14.0%, US 4.3% (1993)


Imports:

    $14.2 billion (f.o.b., 1994 est.)
  Commodities:
    fuels and energy 12.6%, raw materials and semi-finished goods 27.3%,
    machinery and transport equipment 33.0%, consumer goods 21.2%, food and
    agriculture 5.9% (1993)
   Major Trade Partners::
    Germany 21.5%, Italy 6.1%, Austria 11.8%, the FSU 20.9%, US 4.3% (1993);
    note - about one-fourth of the imports from the FSU were MiGs delivered as a
    debt payment
External debt:
    $27 billion (September 1994)