Emerging Markets / April 5, 2018

Agribusiness and Macroeconomics in Hungary

The Republic of Hungary is set to hold elections on Sunday, April 8, and it is expected that the incumbent Prime Minister, Viktor Orban, will be reelected for another term. Prime Minister since 2010, Viktor Orban is a socially conservative politician who keeps the policies of the European Union at arm’s length as he leads Hungary. After the collapse of the Soviet Union, Hungary was able to free itself from communist party rule and began liberalizing its national economy. By 2004, Hungary had joined the European Union and the North Atlantic Treaty Organization (NATO). Today, Hungary is a parliamentary republic that has held free multiparty elections since 1990 and is expected to join the Eurozone by 2020. With a total territory of 93.028 square kilometers, Hungary is about the same size as Indiana. Furthermore, Hungary is a landlocked country that borders with seven other nations.

Agribusiness and Macroeconomics in Hungary

Geographically, the country is mostly flat with rolling hills and low mountains throughout the north. Similarly, Hungary has a temperate seasonal climate with humid winters and warm summers. Currently, Hungary has a total population of almost 10 million citizens with an average age of 42 years. Likewise, about 72% of Hungary’s population lives in an urban setting, notably the capital city of Budapest with its 1.7 million inhabitants. In economic terms, the country has a Gross Domestic Product (GDP) of US$284 billion (PPP), which is divided into 4% agriculture, 31% manufacturing, and 65% services. Moreover, it is estimated that the agricultural industry employs 5% of the national labor force, while manufacturing employs 30% and services employ another 65%. Furthermore, in Hungary, the agriculture industry utilizes 59% of the national territory, while another 23% is forested.

In terms of trade, Hungary is the world’s twenty-eighth largest export economy. During 2016, the country imported US$91.4 billion worth of goods and exported US$102 billion, resulting in a trade surplus of US$11.5 billion. Moreover, Hungary’s main export, representing 11% or US$11 billion of the country’s total in 2016, was cars. Similarly, the country’s main import that same year, representing 5.6% or US$5.2 billion of all international purchases, were vehicle parts. Meanwhile, Hungary’s main trading partners are fellow EU members, notably Germany, the Czech Republic, Austria, and France, as well as China.

In recent years, the average per capita protein intake of animal origin amongst the Hungarian population has been 43 grams daily. Meanwhile, land distribution in Hungary has evolved throughout the last half century. Back in 1961, permanent pastures and meadows in the country covered 1.46 million hectares, while arable land covered 5.2 million hectares and permanent crops accounted for 430.000 hectares. More recently, in 2015, permanent pastures and meadows had decreased to account for 762.000 hectares, while arable land represented about 4.41 million hectares and permanent crops covered approximately 173.000 hectares. In 1961, the cereals market in Hungary utilized 3.32 million hectares of land and yielded some 6.17 million metric tons annually. However, in 2016, the country devoted 2.77 million hectares of land to cereals production and yielded 14.1 million metric tons.

(Read more about Macroeconomics and Trade in the Baltic States)

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