Economics and business
countryaah, Hungary's economy is one of the largest in Eastern
Europe. The country has an export-oriented business sector
that has attracted a lot of foreign investment capital
during most of the 1990s. The manufacturing industry has
been modernized and new industries have been added,
including car manufacturing and the IT industry. At the same
time, the service and service industries have grown
strongly; to this, not least a growing tourism industry has
contributed. Despite stable GDP growth, the country has for
a long time had large deficits in government finances. The
country's unstable finances, as well as dependence on the
export industry and foreign investment, made the country
particularly susceptible to the global financial crisis of
2008–09. To save Hungary from economic collapse, the country
received financial support from the IMF, the EU and the
World Bank, among others. In 2010, the economy began to
recover, thanks in large part to the fact that exports to
Germany again gained momentum. GDP growth for 2014 is
estimated at just under 3.6 per cent. However, the country's
financial problems remain.
The transition to planning economics took place in
1947–51. Even in a typical agricultural country like
Hungary, heavy industry was invested. In the 1950s and
1960s, the political forces seemed to alternate
centralization and decentralization. The introduction of the
new economic mechanism (NEM) in 1968 was a turning point:
Hungary was given a combination of central planning and
market economy. The companies were given greater
independence with, among other things, free pricing, freer
choice of production focus and the opportunity to make their
own investment decisions. NEM undoubtedly had success
initially, but was slowed down by the Communist Party
apparatus. The international recession in the early 1980s
had a negative impact on Hungary.
After the fall of communism, for the companies, a
privatization was started, which largely took place in
collaboration with Western European and American companies.
About 2/3 of the country's area is usable land. Hungary
is among the world's largest producers of goose meat, canary
seed and rye wheat. Other important crops are wheat, corn,
sugar beets, potatoes, sunflowers and apple. In northeastern
Hungary there are vineyards, where the famous Tokai wines
are produced. Half of the agricultural production value
comes from livestock management, especially pork, dairy
products, chicken meat and beef.
More than half of the country's land is agricultural
land, especially on the extensive river plains. In 2017, the
agricultural sector contributed 4 percent of the country's
GDP, and together with forestry, it employed nearly 5
percent of the country's employment.
During the Communist era, Hungary was one of Eastern
Europe's most important agricultural producers. In 1960, 90
percent of agriculture was state-owned, but in the 1960s
Hungary switched to self-governing units; In 1990, 3/4 of
the cultivated land was used by collective and 1/4 of state
agriculture. According to the plans, 80 percent of the
agricultural land is to be privatized and the former owners
and their heirs are given the opportunity to redeem the
property. Due to the loss of a large part of the Soviet
market and a surplus of agricultural products in the West,
Hungarian agriculture has growing marketing problems.
About 1/5 of Hungary's area is covered by forest; the
largest contiguous forest areas are located in the north.
Through new plantings, the forest area in 1985–95 has
increased by approximately 2,000 km2. However,
the forest industry is of little importance.
Raw material resources and energy consumption
Hungary produces only small quantities of minerals and
the sector contributes marginally to the country's GDP. The
country's most important mineral deposits are bauxite from
the Bakony forest and Vértesbergen as well as the Baranya
area in southern Hungary. These form the basis of the
domestic aluminum industry. Other notable minerals and
industrial minerals extracted are iron, manganese, natural
gravel, clay, gypsum, perlite and gallium.
The country is heavily dependent on imports of petroleum
and petroleum products. Natural gas and oil are extracted in
southern and southwestern Hungary. Most of the gas is
imported via the Druzh pipeline from Ukraine and the
About 40 percent (2009) of its own electricity generation
comes from the nuclear power plant in Paks near the Danube
in central Hungary. In total energy use, oil and natural gas
dominate. These assets, like coal (coal at Pécs and lignite
in the Miskolcom area), are insufficient and imports are
forced. Hungary, like the other Eastern European states, is
connected to the Friendship's oil pipeline. About 8 per cent
of the energy supply is based on renewable sources.
Even during the interwar period, Hungarian industry was
almost entirely based on agricultural products such as
mills, sugar mills and canning factories. As in the other
Eastern bloc countries, a heavy industry investment was
carried out in Hungary; the new steel mill town of
Dunaújváros (1950–61 Sztálinváros) can be seen as a symbol
of this new direction. The most important industrial sectors
were the engineering industry, the chemical industry, the
electrical and electronic industry and the food industry.
During the first half of the 1990s, the production value of
the industry fell by almost 35 per cent, in the mining,
metal and engineering industries by about 50 per cent.
During the 1990s, the Hungarian economy, and thus also
the industry, underwent a major restructuring and
modernization; including. privatizations and improvements in
the quality of goods and services were carried out. The
industries that first showed signs of recovery were the
lighter industry and the wood and paper industries. Later,
the chemical industry also began to show positive signs.
During the 1990s, the industrial sector attracted large
foreign investments and a number of new industries have
emerged, including the telecom, pharmaceutical and
During the communist era, trade with the SEV countries
(COMECON) in general and the Soviet Union in particular
dominated. Today, almost 70 percent of exports to the
western countries go. Hungary's most important trading
partners are Germany, the Russian Federation and Romania.
The most important export goods are machinery, food and
engineering products. The most important import goods are
engineering industrial products as well as fuel and
Tourism and gastronomy
Tourism is well developed and its importance for the
country's economy is steadily increasing. As a planned
economic country within the Eastern bloc, tourists were
welcomed. Around 9.5 million visited the country in 2010.
The three most important destinations are Budapest, Lake
Balaton and the Danube Desert.
The two parts of the capital, the high Buda with a
fortress and the more spatially planned Pest, are separated
by the Danube. Across the river are magnificent bridges. A
visit to one of the health baths is a must for the Budapest
tourist. Outside the capital, Lake Balaton is the most
visited region. The lake is 80 km long and only a few meters
deep. This makes it a warm bathing lake and, especially on
the northern side of the lake, it is close between holiday
villages, campsites and hotels. The scenic Danube Curve lies
north of Budapest at Esztergom.
Hungarian cuisine is solid, tasty and must have. Lake
fish, cabbage, pork and smoked pork, onions, sour cream and,
above all, peppers are excellent ingredients. Famous
Hungarian dishes such as goulash, mutton (stew with
meat that is too fat to turn into goulash, but also fish or
seafood), tokány (shredded beef, white wine, sour
cream) and bell pepper (stew with light meat or
fish) all of the paprika flavor. Soups are everyday foods,
usually flavored with poppy seeds and garlic; they are often
eaten with dumplings (csipeteke) or short pasta.
Freshwater fish are popular foods: carp, pike and sterling
are served uncooked or in pots and soups, often with green
peppers, bacon, mushrooms, cream and dill. Roasted goose is
a common dish and goose liver is included in many dishes.
The relatively heavy food is often served with salads where
sauerkraut, salted cucumber, beetroot and marinated or
pickled peppers take the main role, they are often seasoned
with cumin or horseradish. Despite the rich variety, it is
difficult to resist a bit of rétčs after the food,
the Hungarian variety of strudel that can contain apples,
cherries or nuts. Dobo's torta is a cake with many
layers of sugarcane bottoms interspersed with a sweet and
powerful mocha cream. Other common desserts are stuffed
pancakes and cheese balls with melted butter.