Hungary - Balance of payments



Having scrapped central planning, the Hungarian government is engaged in stabilizing the economy and taming inflation. In 1992, exports had grown by 7.4%, but recession in export markets, western European protectionism, an appreciating forint, bankruptcies of firms producing one-third of exports, and drought caused Hungarian trade to slow down. In 1994, Hungary had a current account deficit of $4 billion, but it shrank to $2.5 billion in 1995, and to a further $1 billion in 2001. Export markets were weak in 2003, and were not expected to rebound until mid-2004. Strong private consumption growth was sustaining the growth of the economy in 2003, but the current account deficit was forecast at 5.4% of GDP in 2003/04.

The US Central Intelligence Agency (CIA) reports that in 2002 the purchasing power parity of Hungary's exports was $31.4 billion while imports totaled $33.9 billion resulting in a trade deficit of $2.5 billion.

The International Monetary Fund (IMF) reports that in 2001 Hungary had exports of goods totaling $28.1 billion and imports totaling $30.1 billion. The services credit totaled $7.71 billion and debit $5.55 billion. The following table summarizes Hungary's balance of payments as reported by the IMF for 2001 in millions of US dollars.

Hungary

Current Account -1,097
Balance on goods -2,018
Balance on services 2,163
Balance on income -1,488
Current transfers 245
Capital Account 317
Financial Account 617
Direct investment abroad -337
Direct investment in Hungary 2,440
Portfolio investment assets -149
Portfolio investment liabilities 1,526
Other investment assets -3,430
Other investment liabilities 446
Net Errors and Omissions 79
Reserves and Related Items 84
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