Hungary is a democracy with a unicameral National Assembly. Executive power is in the hands of the President, who is elected for five years. Hungary joined NATO in 1999 and the European Union in 2004.
General information about Hungarian economy
Hungary is now one of Europe's fastest-growing and most open economies, deeply integrated into the European economy thanks to its accession to the European Union. In June 2006 the government decided to propose a reform plan, in which it wants to attack Hungary’s budget deficit, at the level of more than 10% of GDP at that time, by raising taxes and combating waste in the public sector. The goal is to cut the budget deficit to 6.6% of GDP in 2007, about 4% in 2008, and about 3% in 2009. Such reductions could put Hungary on the path to join the Euro zone by 2012, two years later than its original target.
Taxes
Hungary's taxation of an individual's income is progressive. In 2006 the tax rate in Hungary for an individual was 18 – 36%. There are reduced rates of tax for certain income earners. Corporate tax in Hungary in 2006 was fixed at 16%. Corporate tax for income up to
€20,000 was 10%, on the basis of certain conditions.
Foreign trade
Foreign investment has been the key to Hungary's economic success. Since 1989, Hungary has been a leading destination for FDI in central and eastern Europe - including the former Soviet Union. Currently, foreign firms control two-thirds of manufacturing, 90% of telecommunications, and 60% of the energy sector.
Inflation and unemployment
At the end of 2006 the inflation rate amounted 4%.
The unemployment rate has risen in the last years and reached the level of 7.5% Gross monthly salary in 2006 was €522.55.
Agriculture and food industry
Hungarian agriculture and the food industry still play a significant role in the Hungarian economy but its share in total country production is decreasing fast. In 2006 it reached 3.1% of GDP.
Infrastructure and communication
The railway infrastructure in 2006 in Hungary was 7,897 km which was three times less than in Poland and almost two times more than in Bulgaria. Similar situation is in highway length which in 2006 was 159,568 km (four times more than in Bulgaria and almost two times less than in Poland).
In 2006, 42% of the population had access to the internet and a year earlier over 9.3 million people used mobile phones.
The main natural resources of Hungary are: bauxite, coal, natural gas, fertile soils, arable land and the main industries are: mining, metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals) and motor vehicles.
Area: 93,030 sq km
Population: 10.055 million
Capital city: Budapest
Language: Hungarian
Ethnic groups: Hungarian 95%, Roma 2.1%, German 1.2%, Slovak 0.4%, Others 1.3%
Land boundaries: Austria, Croatia, Romania, Serbia and Montenegr1o, Slovakia, Slovenia, Ukraine
MACRO DATA
GDP (real growth): 3.9%
GDP (PPP): €94,544 million
GDP per capita: €9,454.1
Inflation: 3.9%
Unemployment: 7.5%
Export: €59.32 billion f.o.b.
Import: €61.3 billion f.o.b.
* 2006 est. source: Eurostat
USEFUL DATA
Currency: forint (HUF)
Exchange rate (average): €/HUF 251.66
Time zone: GMT +1
Area code: +36
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