A direct consequence of the restructuring process and the vanishing of traditional outlets led to a drastic decrease of industrial sales in the first years of economic transformation. Only in 1993 did a slight growth occur, which continued in 1994 and 1995. During the two last years, a steady and distinct economic growth – between 4.5 and 5.5 percent – has been registered. In spite of the crises in Russia and the Kosovo, the Hungarian economy is expected to have grown by 4 % in 1999. A positive development can also be registered as to the inflation rate, which dropped below 10 percent by the beginning of this year.
Commodity trade marked by globalisation
The most important Hungarian trade partners – both in exports and imports – are Germany, Austria and Italy. The high interest of Austrian enterprises in the Hungarian market remained practically steady in the first half of 1999. Austrian exports to Hungary were worth more than ATS 15 billion in the first five months of the year. In 1998, Austrian deliveries amount to remarkable ATS 38 billion, corresponding to an additional growth of almost 10 percent compared to the already high figures for 1997.
The importance of the economic linkage between Austria and Hungary is constantly rising. This is also expressed by the structure of the products exchanged. The Austro-Hungarian commodity trade is largely „globalised”. The most important Austrian and Hungarian importers or exporters are groups that have settled in one of the respective countries, but also purely Austrian company groups supply each other, share marketing and research activities, and appear together on world markets.
The mutual complementation and supply is especially true for information technology, the electronic entertainment media and the car industry, i.e. for those sectors which primarily contribute to the growth of the Hungarian economy and which are regarded as prospect sectors both in Austria and worldwide.
Foreign investment is sought
After Germany, the USA and France, Austria is fourth on the list of foreign investors, which concentrate their activities primarily on three regions in West and Central Hungary, especially in the agglomerations of Györ, Székesfehérvŕr and Budapest. These areas are connected to the West-European highway network by high-capacity motorways, and have a perfectly developed infrastructure in many other respects. However, they already experience a lack of skilled workforce. East and Northeast Hungary, however, are still waiting for substantial foreign investment.
The foreign debts of the Austrian neighbour Hungary are very high. With credits of more than USD 25 billion Hungary has the highest per head debts among in the former Eastern Block. In spite of this negative condition, Hungary is appreciated on international finance markets for being a reliable debtor, which is also reflected by a gradually improving “rating”.
Hungary focusing on EU membership
In addition to efforts to equal out regional imbalances, Hungary’s economic policy is preparing for the EU membership. EU “fitness” shall be achieved by 2002. Environmental protection and agriculture are those sectors where liberal phase-in regulation is expected. For the EU, on the other hand, the free movement of employees and border-crossing service performance are sensitive subjects with the EU. Nevertheless, Hungary continues to head the list of the applying countries. (Source: aqua press Int. 05/1999)
Manuela Prusa
