Economy

During 1949-89, virtually all enterprises in Hungary, except for a few small businesses, were owned and operated by the government. After major economic reforms in the mid 20th century, economic decision-making in Hungary was largely decentralized and emphasis was placed on profits, private initiative, and efficiency. Following the collapse of Hungary's Communist government during 1989-90, programs were begun to privatize many industries.

Manufacturing and agriculture are the mainstays of the economy. Mining is of modest importance; bauxite, coal, iron ore, natural gas, and petroleum are produced, but large amounts of mineral imports are required. The country therefore imports additional supplies. Forestry and fishing are of minor significance.

Hungary's basic currency unit is the forint.

of Hungary include its fertile soils and its favorable climate, which are a great boost to agriculture.. 65 per cent of the land is covered by farms and nearly 20 per cent of land is forested. Hence, the country imports large amounts of timber.

The country has limited deposits of minerals, such as coal, iron ore, manganese, natural gas, and oil. Bauxite, which is the source of aluminum, is the chief mineral mined in the country. Additional supplies of minerals have to be imported.

Uranium is the country’s main source of nuclear energy, and was discovered in the Mecsek Mountains near Pecs in the early 20th century. Soviet Union assisted Hungary in developing its uranium mines. Extra electrical power is imported as the country does not produce enough electric power to meet its needs. Nuclear reactors have been constructed since the late 20th century, which have hence helped in diminishing the country’s dependence on imported oil and coal.

Service industries employ nearly two-thirds of the workers and are singularly important. The industries that fall under the category of the service industries include activities like education, engineering, finance, health care, and trade. There are also a number of commercial banks in Hungary, as well as a national securities exchange, and a stock exchange in Budapest.

Engineering holds an important place in the economy of the country, having modernized the factories of the country and its manufactured products. Retail and wholesale trade are also important, employing a number of people in the main cities. Exporting farm products and importing mineral products constitute the important wholesale trade activities.

Before World War II, Hungary had little manufacturing except for the processing of food. In 1949 the newly established Communist government nationalized all but the smallest manufacturing companies and began a program of rapid industrialization. It emphasized development of heavy industries—those producing such products as iron and steel, aluminum, petroleum products, fertilizer, chemicals, cement, machinery, motor vehicles, and tractors. Although heavy industries remain important, increasing emphasis has been placed on the production of consumer goods.

Food processing, including flour milling, sugar refining, and meat packing, has long been an important industry. Also significant are the electrical, textile, garment, and leather products industries. Budapest is the principal manufacturing center. Other important industrial centers include Miskolc, Debrecen, Szeged, and Pécs.

Hungary's richest natural resource is its fertile soil. Roughly 70 per cent of the total area is farmland, three-fourths of which is used for crops.

For centuries most of the land was held by large private estates and tilled by peasants. After World War II and Communist seizure of political power, farming was drastically changed. Estates were broken up into state farms or cooperatives. After Hungary's Communist government collapsed during 1989-90, the new government began to transfer ownership of farms from the state to private groups or individuals.

The chief crops are grains. Corn and wheat are by far the most important; barley, rye, oats, and rice are grown in much smaller amounts. Sugar beets, sunflowers, turnips, and potatoes are extensively produced. Paprika, used in Hungarian goulash, is a notable specialty crop. The hill region around Tokaj, in the northeast, is known for its grapes and excellent Tokay wines.

Pigs, sheep, cattle, and poultry make up most of the livestock which accounts for around 40 per cent of Hungary’s farm output. Chickens and hogs are raised by the farmers. They also raise dairy cattle, sheep, beef, and turkeys.

contributes much to the economy of Hungary. Hungary is the main exporter of goods like alumina, electronic equipment, fruits and vegetables, meat, pharmaceuticals, steel, transportation equipment, and wine. Hungary also imports a number of products such as advanced machinery, automobiles, chemicals, electric power, iron ore, livestock feed, natural gas, paper, and petroleum. Trading takes place with European countries like, Austria, Italy, Germany and Russia. Russia supplies Hungary with huge amounts of petroleum and natural gas.

Railways and highways extend outward from Budapest and link most of the country's large cities. There are around 4,800 miles (7,800 kilometers) of railways, 115,000 miles (185,000 kilometers) of roads, and 1,000 miles (1,600 kilometers) of navigable waterways. Most of the river traffic is on the Danube. Ferihegy Airport, near Budapest, is the focus of international air service. Other than Budapest, there are international airports near Siofok on Lake Balaton. MALÉV is the national airline which is jointly owned by the government and private investors..

Nearly 30 newspapers are circulated in the country, Nepszabadsag (People's Freedom) being the most important.