Hungary 

Hungary country policy

Policy established 17 February 2012

• The country ceiling is 2000 mln euro
• Early warning signal 500 mln euro
• - of which was used as at 2012-02-29 0 mln euro

Country class: 0

Particuliere kopers met toegang tot deviezen: Onherroepelijk accreditief of bankgarantie (voorwaardelijk)

Private FX earning buyers: ILC or commercial bank g'tee (conditional)

Overheidskopers en overige particuliere kopers: dekking opgeschort

Public buyers and other private buyers: cover suspended

Hungary country facts

Atradius Dutch State Business Economic Research

Country Report last updated 8 March 2012
Country: HUNGARY

Political Situation
Stable

Head of state
President Pal Schmitt.

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

Internal Economic Situation
Weak Recovery After Deep Recession

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 6.9%). In 2010 and 2011 a sluggish recovery has emerged (1,1% and 1,5%). A contraction by 1,1% is expected for 2012, with a return to modest growth in 2013. Households and businesses continue to rein in spending because of lack of new bank funding, high private sector debt service in €/Swfranc, budgetary tightening and the high unemployment rate (>10%). The currency depreciated strongly in 2011, urging NBH to raise the base rate to 7.0%. Banking sector has a weak loan portfolio with high forex risk and NPL-ratios >10%; 90% of the banking sector is foreign owned. Worse TI-corruption index: 50th of 180. 
 
External Economic Situation
Sovereign Downgradings  

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 remains positive on the back of export growth but weak import growth as domestic demand remains subdued. The currency had fluctuated strongly against the euro in 2011 and 2012.