Economy (Hungary)
=================


     Overview:
         Hungary is in the midst of a difficult transition between a command and a
         market economy. Agriculture is an important sector, providing sizable export
         earnings and meeting domestic food needs. Industry accounts for about 40% of
         GDP and 30% of employment. Hungary claims that less than 20% of foreign
         trade is now with former CEMA countries, while about 70% is with OECD
         members. Hungary's economic reform programs during the Communist era gave it
         a head start in creating a market economy and attracting foreign investment.
         In 1990, Hungary received half of all foreign investment in Eastern Europe
         and in 1991 received the largest single share. The growing private sector
         accounts for one-quarter to one-third of national output according to
         unofficial estimates. Privatization of state enterprises is progressing,
         although excessive redtape, bureaucratic oversight, and uncertainties about
         pricing have slowed the process. Escalating unemployment and high rates of
         inflation may impede efforts to speed up privatization and budget reform,
         while Hungary's heavy foreign debt will make the government reluctant to
         introduce full convertability of the forint before 1993.
     GDP:
         purchasing power equivalent - $60.1 billion, per capita $5,700; real growth
         rate - 7% (1991 est.)
     Inflation rate (consumer prices):
         34% (1991 est.)
     Unemployment rate:
         8.0% (1991)
     Budget:
         revenues $12.7 billion; expenditures $13.6 billion (1992 planned)
     Exports:
         $10.2 billion (f.o.b. 1991)
       commodities:
         capital goods 25.9%, foods 23%, consumer goods 16.5%, fuels 2.4%, other
         32.2%
       partners:
         USSR and Eastern Europe 31.9%, EC 32.2%, EFTA 12% (1990)
     Imports:
         $11.7 billion (f.o.b., 1991)
       commodities:
         capital goods 31.6%, fuels 13.8%, manufactured consumer goods 14.6%,
         agriculture 6%, other 34.0%
       partners:
         USSR and Eastern Europe 34%, EC 31%, EFTA 15.4%
     External debt:
         $22.7 billion (January 1991)
     Industrial production:
         growth rate - 20% (1991 est.)
     Electricity:
         6,967,000 kW capacity; 28,376 million kWh produced, 2,750 kWh per capita
         (1990)
     Industries:
         mining, metallurgy, engineering industries, processed foods, textiles,
         chemicals (especially pharmaceuticals), trucks, buses
     Agriculture:
         including forestry, accounts for about 15% of GDP and 19% of employment;
         highly diversified crop-livestock farming; principal crops - wheat, corn,
         sunflowers, potatoes, sugar beets; livestock - hogs, cattle, poultry, dairy
         products; self-sufficient in food output
     Illicit drugs:
         transshipment point for Southeast Asia heroin transiting the Balkan route