HUNGARY - ECONOMY

For centuries, Hungary has been an agricultural country, but since The Second World War it has become heavily industrialized. Through the 1970s and 1980s, industry was largely state-owned, and two thirds of agricultural output came from collective and state farms. Hungary’s economy underwent difficult readjustment in the 1990s, as it moved from producing goods chiefly for export to the USSR to developing a market-based economy and finding new trading partners. By the end of 1995, almost all retail trade had been privatized, and only less than half of all economic output originated from state-owned enterprises. Economic reforms also brought high unemployment and rising inflation, but today Hungary’s economy is one of the most prosperous in what used to be called Eastern Europe.

Slightly over 50% of Hungary’s land is arable. With highly diversified crop and livestock production, the country is self-sufficient in food and in the mid-1990s was making about 15% of its export earnings from agriculture. Corn, wheat, barley, sugar beets, potatoes, sunflower seeds, and grapes are the major crops. Pigs, cattle, and sheep are raised.

Bauxie

Bauxie - source

Hungary has been an important producer of bauxite, and deposits of copper, natural gas, coal, oil, and uranium have been exploited as well. Mining was drastically curtailed in the 1990s as the country moved to a market economy and found it was not cost-effective to exploit the country’s minerals at world prices. The gradual decline of gas and oil production is due to the exhaustion of reserves. Industry is well-diversified; major products include steel, chemicals, pharmaceuticals, cement, processed food, textiles, and motor vehicles. About one third of Hungarian industry is located in or near Budapest. Other industrial centers are Győr, Miskolc, Pécs, Debrecen, Szeged, and Dunapentele. The tourism is also an important source of foreign capital. The country is a member of the European Union, and its main trading partners are other countries in the EU (especially Germany, Austria, and Italy) and Russia.