Hungary - Social Profile

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 is widespread, with cumulative foreign direct investment totaling more than $200 billion since 1989.

The government's 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 financial crisis in late 2008 - led Budapest to seek and receive an IMF-arranged financial assistance package worth over $25 billion.

The global economic downturn, declining exports, and low domestic consumption and fixed asset accumulation, dampened by government austerity measures, resulted in an economic contraction of 6.7% in 2009.

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