Hungary Overview: Economy
Hungary has long been an agricultural country, but since World War II it has become heavily industrialized. Through the 1980s, industry was largely nationally owned and two thirds of agricultural output came from collective and state farms. Hungary's economy underwent difficult readjustment in the 1990s, as it moved from producing goods chiefly for export to the USSR to developing a market-based economy and finding new trading partners. By the end of 1995, almost all retail trade had been privatized and less than half of all economic output originated from state-owned enterprises. Economic reforms also brought high unemployment and rising inflation, but today Hungary's economy is one of the most prosperous in Eastern Europe.
About half of Hungary's land is arable. With highly diversified crop and livestock production, the country is self-sufficient in food. Wheat, corn, sunflower seeds, potatoes, sugar beets, and grapes are the major crops. Pigs, cattle, sheep, and poultry are raised.
Hungary has been an important producer of bauxite, and deposits of coal, copper, natural gas, oil, and uranium have been exploited as well. Mining was curtailed in the 1990s as the country moved to a market economy and found it was not cost-effective to exploit the country's minerals at world prices. There has also been a decline in gas and oil production due to the exhaustion of reserves. However, mining and metallurgy are still important, as is food processing and the manufacture of construction materials, textiles, chemicals, pharmaceuticals, steel, and motor vehicles. About one third of Hungarian industry is located in or near Budapest. Other industrial centers are Győr , Miskolc , Pécs , Debrecen , Szeged , and Dunapentele. The tourism industry is also an important source of foreign capital. Machinery, equipment, and food products are the most important exports; machinery and equipment, manufactured goods, fuels, and electricity are imported. Germany is the country's largest trading partner by far, followed by Austria, Italy, and France.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.
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