IIPM PUBLICATION
The transition
of the Hungarian economy from being centrally planned to an open market has reaped dividends for the country. The nation has been registering GDP growth rates of around 4% which is double the average of the EU. The growth is driven by the services sector, which accounts for 65.1% of GDP followed by the industrial sector, which contributes 31.2% & agriculture a paltry 3.7%. On the trade front, machinery & transport vehicles contribute over 60% of the total exports, while pharmaceutical and chemical products make up a further 28% of goods. In imports, machinery equipment make up 51% of the imported items, with Germany accounting
for 26.8%, Russia contributing 7.5% & China 7.2% of imported goods.
Hungary’s economic liberalisation, becoming a part of the EU and a member of OECD – has shown tangible results and all of it is evident from the amount of foreign investments fl owing into the country. Global corporations like GE, Electrolux, Ericsson, Audi, Samsung et al are competing for their share, of what seems to be opportunity, worthwhile exploring. The Hungarian government has exploited the opportunities to its fullest, propelling the net FDI inflows into the country to €5.3 billion in 2005. Services & industries like the electric machinery, automotive, and chemical are currently the major recipients of foreign capital.
On the other hand, Hungarian companies too have been proactive in seeking greener pastures beyond the EU in Latin America & Asia. Banking group OTP and hotel operator Danubius are the latest to set footprints abroad after the Hungarian pharma giant Richter Gedeon, which acquired 51% stakes in Polish drug company Polfa Grodzisk for $31 million taking the total outward FDI of Hungary to $337 million in 2005 (UNCTAD).
But still, there are certain challenges facing the economy and the country. The biggest challenge and an impediment to Hungary’s complete integration into EU is its budget deficit. Hungary’s budget deficit for 2006 is expected to hit 10.1% of its GDP – the highest in Europe. The European Commission has till now stood beside Hungary and has given it another year to get its deficit back in line with commission’s prescribed standards, by extending its accession (full integration) deadline from 2008 to 2009.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2006
An IIPM and Malay Chaudhuri – Arindam Chaudhuri Initiative
The transition
of the Hungarian economy from being centrally planned to an open market has reaped dividends for the country. The nation has been registering GDP growth rates of around 4% which is double the average of the EU. The growth is driven by the services sector, which accounts for 65.1% of GDP followed by the industrial sector, which contributes 31.2% & agriculture a paltry 3.7%. On the trade front, machinery & transport vehicles contribute over 60% of the total exports, while pharmaceutical and chemical products make up a further 28% of goods. In imports, machinery equipment make up 51% of the imported items, with Germany accountingfor 26.8%, Russia contributing 7.5% & China 7.2% of imported goods.
Hungary’s economic liberalisation, becoming a part of the EU and a member of OECD – has shown tangible results and all of it is evident from the amount of foreign investments fl owing into the country. Global corporations like GE, Electrolux, Ericsson, Audi, Samsung et al are competing for their share, of what seems to be opportunity, worthwhile exploring. The Hungarian government has exploited the opportunities to its fullest, propelling the net FDI inflows into the country to €5.3 billion in 2005. Services & industries like the electric machinery, automotive, and chemical are currently the major recipients of foreign capital.
On the other hand, Hungarian companies too have been proactive in seeking greener pastures beyond the EU in Latin America & Asia. Banking group OTP and hotel operator Danubius are the latest to set footprints abroad after the Hungarian pharma giant Richter Gedeon, which acquired 51% stakes in Polish drug company Polfa Grodzisk for $31 million taking the total outward FDI of Hungary to $337 million in 2005 (UNCTAD).
But still, there are certain challenges facing the economy and the country. The biggest challenge and an impediment to Hungary’s complete integration into EU is its budget deficit. Hungary’s budget deficit for 2006 is expected to hit 10.1% of its GDP – the highest in Europe. The European Commission has till now stood beside Hungary and has given it another year to get its deficit back in line with commission’s prescribed standards, by extending its accession (full integration) deadline from 2008 to 2009.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2006
An IIPM and Malay Chaudhuri – Arindam Chaudhuri Initiative
No comments:
Post a Comment