1. Hungary Economic Overview Hristo Georgiev Dilyan Dimitrov

2. Hungary – Basic Data Size area: 93,030 km2; Population: 10.038m (Mar 2008 est.); Population growth: -0.2% (average, 2004-2007); Government type: Parliamentary democracy; Currency: Hungarian forint (HUF)

3. Recent Economic History Transition to democracy and open market economy After fall of the communist regime structural reforms and stabilization measures in the 1990’s Deterioration of the macroeconomic performance and new reforms in the banking and public sectors in the mid-1990’s Strong economic performance after the reforms Since 2001 shift from structural reforms to rebalancing the living standards and upgrading of the public infrastructure

4. GDP GDP – $ 138 billion (2007) Composition by sectors agriculture: 3.3% industry: 32.4% services: 64.2% (2007 est.). GDP per capita - $ 13,745

5. GDP Growth Rate

6. Labor Market Population - approx. 10 million Employed – 3,9 million Employment rate – 57% Employment by sectors: agriculture: 6.2% industry: 27.1% services: 66.7% Gross monthly average salary: 185,000 HUF (approx. 740 EUR) Unemployment – 9.1% (Feb. 2009)

7. Unemployment Rate

8. International Trade Exports: $109.3 billion f.o.b. (2008 est.) machinery and equipment 61.1% other manufactures 28.7% food products 6.5% raw materials 2% fuels and electricity 1.6% (2003) Export Partners: Germany 28.1%, Italy 5.6%, France 4.7%, Austria 4.6%, Romania 4.5%, UK 4.5%, Slovakia 4.2%, Poland 4.2% (2007)

9. International Trade Imports: $107.5 billion f.o.b. (2008 est.) machinery and equipment 51.6% other manufactures 35.7% fuels and electricity 7.7% food products 3.1% raw materials 2.0% (2003) Import partners:Germany 26.6%, China 7.8%, Russia 6.9%, Austria 6.1%, Italy 4.5%, France 4.3%, Netherlands 4.3% (2007)

10. Current Account Balance

12. Inflation

13. Effects of Crisis on Hungary Decline in economic growth Tightened credit conditions and fiscal policy

14. Effects of Crisis on Hungary Key indicators200820092010201120122013 Real GDP growth (%)0.5-4.50.42.73.63.5 Consumer price inflation (av; %)6.13.02.72.52.32.1 Consumer price inflation (year-end; %)3.73.02.62.42.22.0 Budget balance (% of GDP)-3.4-2.9-2.8-2.5 -2.2 Current-account balance (% of GDP)-5.8-3.5-3.8-4.2-3.9-3.6 Short-term deposit rate (av; %)8.18.07.36.86.35.8 Exchange rate Ft:US$ (av)172.1209.7200.7191.5182.4176.2 Exchange rate Ft:€(av)251.5280.0278.0271.0264.0259.0

15. Monetary and Fiscal Policy IMF package of $25bn given in portions Planned tightening of fiscal policy IMF is concerned that Hungary is not committed enough to reform

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