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Economy
Hungary

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):

$191.7 billion (2007 est.)

GDP (official exchange rate):

$138.4 billion (2007 est.)

GDP - real growth rate:

1.3% (2007 est.)

GDP - per capita (PPP):

$19,300 (2007 est.)

GDP - composition by sector:

agriculture: 2.8%
industry: 31.5%
services: 65.8% (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:

7.3% (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)

Distribution of family income - Gini index:

28 (2005)

Investment (gross fixed):

20.9% of GDP (2007 est.)

Budget:

revenues: $64 billion
expenditures: $71.87 billion (2007 est.)