Hungary

Franchise Association:
Hungarian Franchise Association
POB 446
Budapest, H-1537
Phone: (361) 212 4124
Fax: (361) 212 5712
Website: www.franchise.hu

Background:
Hungary became a Christian kingdom in A.D. 1000 and for many centuries served as a bulwark against Ottoman Turkish expansion in Europe. The kingdom eventually became part of the polyglot Austro-Hungarian Empire, which collapsed during World War I. The country fell under Communist rule following World War II. In 1956, a revolt and an announced withdrawal from the Warsaw Pact were met with a massive military intervention by Moscow. Under the leadership of Janos KADAR in 1968, Hungary began liberalizing its economy, introducing so-called "Goulash Communism." Hungary held its first multiparty elections in 1990 and initiated a free market economy. It joined NATO in 1999 and the EU in 2004.


Geography:
Area: 93,030 sq. km. (35,910 sq. mi.); about the size of Indiana.
Cities: Capital--Budapest (est. pop. 2 million). Other cities--Debrecen (220,000); Miskolc (208,000); Szeged (189,000); Pecs (183,000).

People:
Nationality: Noun and adjective--Hungarian(s).
Population (July 2007 est.): 9,956,108.
Ethnic groups: Magyar 89.9%, Romany 4% (est.), German 2.6%, Serb 2%, Slovak 0.8%, Romanian 0.7%.
Religions (2001 census): Roman Catholic 51.9%, Calvinist 15.9%, Lutheran 3%, Greek Catholic 2.6%, Jewish 1%, others, including Baptist Adventist, Pentecostal, Unitarian 3%.
Languages: Magyar 98.2%, other 1.8%.
Education: Compulsory to age 16. Attendance--96%. Literacy--99.4%.
Health (2007 est.): Infant mortality rate--8.21/1,000. Life expectancy--men 68.73 yrs., women 77.38 yrs.
Work force (2006 est. 4.21 million): Agriculture--5.5%; industry and commerce--33.3%; services--61.2%.

Economy:
GDP: HUF 27,220 billion (approx. $163.9 billion) ($1=HUF 166.1 - average exchange rate Jan – Oct 2008) Annual growth rate (2008 est.): 1.8% Per capita GDP (2008 est.): $16,400.
Natural resources: bauxite, coal, natural gas, fertile soils, arable land.
Agriculture/forestry (2006 est., 3.4% of GDP): Products--meat, corn, wheat, sunflower seeds, potatoes, sugar beets, dairy products.
Industry and construction (2007 est., 44,3% of GDP): Types--machinery, vehicles, chemicals, precision and measuring equipment, computer products, medical instruments, pharmaceuticals, textiles.
Trade (2007 est.): Exports ($94,6 billion)--machinery, vehicles, food, beverages, tobacco, crude materials, manufactured goods, fuels and electric energy. Imports ($94,7 billion)--machinery, vehicles, manufactured goods, fuels and electric energy, food, beverages, and tobacco. Major markets--EU (Germany, Austria, Italy, France, UK, Romania, Poland). Major suppliers--EU (Germany, Austria, Italy, France, Netherlands, Poland), Russia, China.
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. The government's IMF-mandated austerity measures, imposed since late 2006, have reduced the budget deficit from over 9% of GDP in 2006 to 3.3% in 2008. Hungary's impending inability to service its short-term debt - brought on by the global credit crunch in late 2008 - led Budapest to seek and receive an IMF-arranged financial assistance package worth over $25 billion. The global financial crisis, declining exports, and low domestic consumption and fixed asset accumulation, dampened by government austerity measures, will result in a negative growth rate of about -1.5% to -2.5% in 2009.