Business Profile
Economy: Hungary is poor in natural resources other than bauxite, natural gas and some oil. For this reason, it relies especially heavily on foreign trade, which accounts for half of its GDP. The country has a fairly well-developed industrial economy concentrated in chemicals, plastics, pharmaceuticals, fertilisers, computers and telecommunications, mining, construction and aluminium (from bauxite deposits). It has also traditionally been an exporter of agricultural produce, particularly fruit and vegetables, maize and wheat, sugar beet, potatoes and livestock.
Before the political upheaval in Eastern Europe during 1989, Hungary had gone the furthest of all the socialist-bloc countries towards decentralising and deregulating the economy. In the 1990s, it eschewed the Polish-style ‘big bang’ road to capitalism and opted for a more gradual transition. Price controls were removed, and a programme of privatisation was implemented, starting with the retail and property sectors. By 1995, small business privatisation was more or less complete, while sales of the larger state-owned concerns proceeded apace. Current estimates put 85 per cent of the economy under private ownership. Hungary’s economic performance is currently steady: growth is over three pre cent, and inflation six per cent.
Foreign investment has picked up, largely as a result of the liberalisation of trade through agreements with the EU, EFTA and the Visegrad mechanism, although in recent years there has been a mild backlash against the extent to which foreign companies have penetrated the Hungarian economy. EU membership is the highest priority for the Hungarian government and, since signing an Association Agreement in 1998, the country has secured a place in the ‘first wave’ of potential new members. It may expect to become a full member in 2004. The country’s principal trading partners are Germany, Austria, Italy, Russia and the Czech Republic. Outside Europe, there are important links with the USA, Japan and Brazil.
Business: Businesspeople are expected to dress smartly. Local businesspeople are generally friendly and hospitable and it is usual for visitors to be invited to lunch or dinner in a restaurant. Business cards are widely distributed and visitors are well advised to have a supply available in Hungarian. Best months for business visits are September to May. Appointments should always be made. Interpreter and translation services may be booked through travel agents. Office hours: Mon-Thurs 0800-1630, Fri 0800-1400.
Commercial Information: The following organisation can offer advice: Budapest Kereskedelmi és Iparkamara (Budapest Chamber of Commerce and Industry), Krisztina Krt 99, H-1016 Budapest (tel/fax: (1) 488 2000; e-mail: bkiki@bkik.hu ; website: www.bkik.hu); or ITD Hungary, 46 Eaton Place, London SW1X 8AL, UK (tel: (020) 7235 8767; fax: (020) 7235 4319; e-mail: huntrade.london@virgin.net; website: www.itd.hu/britweb).
Conferences/Conventions: The following organisation can offer advice: Hungarian Convention Bureau, Kálmán Imre u. 2, 1054 Budapest (tel: (1) 472 8840; fax: (1) 472 8841; e-mail: hcb@hungarytourism.hu; website: www.hcb.hu).
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