Hungary 

Hungary country policy

Policy established 07 June 2010

• The country ceiling is 2000 mln euro
• Early warning signal 500 mln euro
• - of which was used as at 2011-08-31 0 mln euro

Country class: 0

Particuliere kopers: Onherroepelijk accreditief, bankgarantie, centrale overheidsgarantie (voorwaardelijk)

Private buyers: ILC, commercial bank, central government g'tee (conditional)

Overheidskopers: Onherroepelijk accreditief, bankgarantie, centrale overheidsgarantie (onvoorwaardelijk)

Public buyers: ILC, commercial bank, central government g'tee (unconditional)

Hungary country facts

Atradius Dutch State Business Economic Research

Country Report last updated 2 May 2010
Country: HUNGARY

Political Situation
After The Parliamentary Elections In APRIL 2010, VERY FIRM 

Head of state
President Laszlo Solyom.

Form of government
Government of Fidesz, headed by prime-minister Viktor Orban.

Internal Economic Situation
Deep Recession Is Bottoming Out

General situation
After years of private/public sector overspending resulting in high GDP-growth and twin deficits, the economy fell into a deep recession in 2009 (GDP contracted by 6.3%). For 2010 another mild contraction is expected (-0.2%) due to further falling domestic demand (-3%). Households and businesses continue to rein in spending because of lack of new funding, the risen debt service in depreciated forint and budgetary tightening. Export is expected to rise by 6% in 2010. Inflation declined to 4.2% in 2009 but a further fall was thwarted by risen public sector tariffs in 2010Q1. Banking sector has a weak loan portfolio with high forex risk; 90% of the sector is foreign owned. Less good TI-corruption index 
 
External Economic Situation
Improving External Position

Main sources of foreign exchange
Machinery and equipment (62%), other manufactures (27%), food products (6%); tourism.

Main foreign markets
EU (80%) of which Germany (38%) and Austria (10%).

Main expenses of foreign exchange
Machinery and equipment (52%), other manufactures (32%), fuels/energy (10%).
 

Balance of payments 
The current account has improved strongly in 2009 due to fallen imports that highly exceeded lower exports. Even a small surplus was reached. Recovering imports will contribute to moderate current account deficits from 2010 on. In Feb. 2008 NBH abandoned the forint trading band, leaving the currency exposed to market sentiment volatility since the global credit crisis. In 2009 the forint depreciated by 17%; since then rather stable.