Hungary - Social Profile

Hungary has made the transition from a centrally planned to a market economy, with a per capita income about 60% of the EU-25 average.

Hungary continues to demonstrate strong economic growth and acceded to the EU in May 2004.

The private sector accounts for over 80% of GDP. Foreign ownership of and investment in Hungarian firms are widespread, with cumulative foreign direct investment totaling more than $34 billion between 1990 and 2003.

Several private sector analysts and sovereign ratings agencies have expressed concerns over Hungary's unsustainable budget and current account deficits. Inflation has declined from 14% in 1998 to 3.5% in 2005. Unemployment in 2005 rose to 7.1%, its highest point since 1999; Hungary's labor force participation rate of 57% is one of the lowest in the Organization for Economic Cooperation and Development (OECD).

Germany is by far Hungary's largest economic partner. Policy challenges include cutting the public sector deficit to 3% of GDP by 2008, from about 6.1% in 2005, and orchestrating an orderly interest rate reduction without sparking capital outflows.

	Ready to do business in Central Europe?
	Register now for access to our full range of support services