Hungarian Economy
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-28 average. In late 2008, Hungary's impending inability to service its short-term debt - brought on by the global financial crisis - led Budapest to obtain an IMF/EU/World Bank-arranged financial assistance package worth over $25 billion. The global economic downturn, declining exports, and low domestic consumption and investment, dampened by government austerity measures, resulted in a severe economic contraction in 2009. In 2010 the new government implemented a number of changes including cutting business and personal income taxes, but imposed "crisis taxes" on financial institutions, energy and telecom companies, and retailers. The IMF/EU bail-out program lapsed at the end of 2010 and was replaced by Post Program Monitoring and Article IV Consultations on overall economic and fiscal processes. At the end of 2011 the government turned to the IMF and the EU to obtain financial backstop to support its efforts to refinance foreign currency debt and bond obligations in 2012 and beyond, but Budapest's rejection of EU and IMF economic policy recommendations led to a breakdown in talks with the lenders in late 2012. Global demand for high yield has since helped Hungary to obtain funds on international markets. Hungary’s progress reducing its deficit to under 3% of GDP led the European Commission in 2013 to permit Hungary for the first time since joining the EU in 2004 to exit the Excessive Deficit Procedure.
GDP (purchasing power parity): $246.4 billion (2014 est.)
GDP (official exchange rate): $137.1 billion (2014 est.)
GDP - real growth rate: 3.6% (2014 est.)
GDP - per capita (PPP): $24,900 (2014 est.)
GDP - composition by sector: agriculture: 3.4%
industry: 31.1%
services: 65.5% (2014 est.)
Labor force: 4.388 million (2014 est.)
Labor force - by occupation: agriculture: 7.1%
industry: 29.7%
services: 63.2% (2011 est.)
Unemployment rate: 7.8% (2014 est.)
Household income or consumption by percentage share: lowest 10%: 3.1%
highest 10%: 22.6% (2009)
Investment (gross fixed): 19% of GDP (2009 est.)
Budget: revenues: $66.28 billion
expenditures: $70.15 billion (2014 est.)
Public debt: 78.2% of GDP (2014 est.)
Inflation rate (consumer prices): -0.3% (2014 est.)
Central bank discount rate: 5.75% (19 December 2012)
Commercial bank prime lending rate: 4.8% (31 December 2014 est.)
Agriculture - products: wheat, corn, sunflower seed, potatoes, sugar beets; pigs, cattle, poultry, dairy products
Industries: mining, metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), motor vehicles
Industrial production growth rate: 3.1% (2014 est.)
Electricity - production: 34.28 billion kWh (2012 est.)
Electricity - consumption: 36.13 billion kWh (2012 est.)
Electricity - exports: 4.76 billion kWh (2013 est.)
Electricity - imports: 16.64 billion kWh (2013 est.)
Oil - production: 23,000 bbl/day (2013 est.)
Oil - consumption: 162,100 bbl/day (2008 est.)
Oil - exports: 0 bbl/day (2012 est.)
Oil - imports: 108,200 bbl/day (2012 est.)
Oil - proved reserves: 27.32 million bbl (1 January 2014 est.)
Natural gas - production: 1.949 billion cu m (2013 est.)
Natural gas - consumption: 9.603 billion cu m (2013 est.)
Natural gas - exports: 1.443 billion cu m (2013 est.)
Natural gas - imports: 8.176 billion cu m (2013 est.)
Natural gas - proved reserves: 7.843 billion cu m (1 January 2014 est.)
Current account balance: $5.824 billion (2014 est.)
Exports: $99.54 billion (2014 est.)
Exports - commodities: machinery and equipment 53.5%, other manufactures 31.2%, food products 8.7%, raw materials 3.4%, fuels and electricity 3.9% (2012 est.)
Exports - partners: Germany 28.8%, Austria 5.8%, Romania 5.7%, Slovakia 5.1%, Italy 4.8%, France 4.7%, Poland 4%, Czech Republic 4% (2014)
Imports: $96.83 billion (2014 est.)
Imports - commodities: machinery and equipment 45.4%, other manufactures 34.3%, fuels and electricity 12.6%, food products 5.3%, raw materials 2.5% (2012)
Imports - partners: Germany 25.6%, Austria 7.4%, Russia 7%, China 6.2%, Slovakia 5.5%, Poland 5.3%, France 4.8%, Czech Republic 4.6%, Italy 4.5%, Netherlands 4.1% (2014)
Reserves of foreign exchange and gold: $44.8 billion (31 December 2014 est.)
Debt - external: $164.8 billion (31 December 2014 est.)
Stock of direct foreign investment - at home: $115.6 billion (31 December 2014 est.)
Stock of direct foreign investment - abroad: $46.91 billion (31 December 2014 est.)
Exchange rates: forints (HUF) per US dollar - 231.7 (2014 est.), 223.7 (2013 est.), 225.1 (2012 est.), 201.05 (2011 est.), 207.94 (2010 est.)
economic climate  
Background: Hungary was one of many countries granted European Union (EU) accession from the 1st of May 2004. Among the countries who were granted entry into the EU Hungary is one of the front runners whose openness to foreign investment and highly skilled workforce have made Hungary’s economy one of the strongest in Central Eastern Europe.
Foreign investment in and ownership of Hungarian firms has been widespread, with cumulative foreign direct investment of €48.7 billion by 2005. Major credit rating agencies rank Hungary as ‘investment grade’. Hungary plays above its weight in Central and Eastern Europe, attracting over one-third of all foreign direct investment to the region (including the former Soviet Union).
Due to lack of real reforms in the basic re-distribution systems in Hungary the present government has faced worsening economic indicators. This made them introduce an austerity package mostly consist of revenue generating measures such as the raising of the middle bracket of value added taxes from 15 to 20 per cent, an extra four per cent 'solidarity tax' for profitable companies and wealthy individuals and a new 20 per cent tax on interest and capital gains.
The latest reform trials have been vetoed by referendums about the introduction of higher education tuition fees and several ways of co-payment in the health care system.
The taxation as such must be simplified and lowered – the government and the representatives of the business life agree on that. Hungary is the second after Belgium among the OECD countries in tax burden in the total labour cost – taxes and contributions take 54.4 per cent of the total labour cost.
Export opportunities:  
Update: This page was last updated on 10 November 2015
Sources: 1. CIA, The World Factbook, https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html
2. http://www.austrade.gov.au
3. DIBNC Experts Team