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Economy of Hungary

The economy of Hungary is a high-income mixed economy, ranked as the 9th most complex economy according to the Economic Complexity Index. Hungary is a member of the Organisation for Economic Co-operation and Development (OECD) with a very high human development index and a skilled labour force, with the 22nd lowest income inequality by Gini index in the world. The Hungarian economy is the 53rd-largest economy in the world (out of 188 countries measured by IMF) with $265.037 billion annual output, and ranks 41st in the world in terms of GDP per capita measured by purchasing power parity. Hungary has an export-oriented market economy with a heavy emphasis on foreign trade; thus the country is the 35th largest export economy in the world. The country had more than $100 billion of exports in 2015, with a high trade surplus of $9.003 billion, of which 79% went to the European Union (EU) and 21% was extra-EU trade. Hungary's productive capacity is more than 80% privately owned, with 39.1% overall taxation, which funds the country's welfare economy. On the expenditure side, household consumption is the main component of GDP and accounts for 50% of its total, followed by gross fixed capital formation with 22% and government expenditure with 20%.

Hungary continues to be one of the leading nations in Central and Eastern Europe for attracting foreign direct investment: the inward FDI in the country was $119.8 billion in 2015, while Hungary invests more than $50 billion abroad. As of 2015, the key trading partners of Hungary were Germany, Austria, Romania, Slovakia, France, Italy, Poland and the Czech Republic. Major industries include food processing, pharmaceuticals, motor vehicles, information technology, chemicals, metallurgy, machinery, electrical goods, and tourism (in 2014 Hungary welcomed 12.1 million international tourists). Hungary is the largest electronics producer in Central and Eastern Europe. Electronics manufacturing and research are among the main drivers of innovation and economic growth in the country. In the past 20 years Hungary has also grown into a major center for mobile technology, information security, and related hardware research. The employment rate in the economy was 68.7% in January 2017, while the employment structure shows the characteristics of post-industrial economies. An estimated 63.2% of the employed workforce work in the service sector, industry contributed by 29.7%, while agriculture employed 7.1%. The unemployment rate was 3.8% in September–November 2017, down from 11% during the financial crisis of 2007–08. Hungary is part of the European Single Market which represents more than 448 million consumers. Several domestic commercial policies are determined by agreements among European Union members and by EU legislation.

Large Hungarian companies are included in the BUX, the Hungarian stock market index listed on Budapest Stock Exchange. Well-known companies include Graphisoft, Magyar Telekom, MKB Bank, MOL Group, Opus Global, OTP Bank, RÁBA Automotive Group, Gedeon Richter and Zwack Unicum. Hungary also has a large number of specialised small and medium enterprises, for example many automotive industry suppliers and technology start ups.

Budapest is the financial and business capital of Hungary. The capital is a significant economic hub, classified as an Alpha- world city in the study by the Globalization and World Cities Research Network and it is the second fastest-developing urban economy in Europe. The per capita GDP in the city increased by 2.4% and employment by 4.7% compared to the previous year, 2014. On the national level, Budapest is the primary city of Hungary for business, accounting for 39% of the national income. The city had a gross metropolitan product of more than $100 billion in 2015, making it one of the largest regional economies in the European Union. Budapest is also among the Top 100 GDP performing cities in the world, as measured by PricewaterhouseCoopers. In a global city competitiveness ranking by the Economist Intelligence Unit, Budapest is ranked above Tel Aviv, Lisbon, Moscow and Johannesburg, among others.

Hungary maintains its own currency, the Hungarian forint (HUF), although the economy fulfills the Maastricht criteria with the exception of public debt. The ratio of public debt to GDP is significantly below the EU average at 66.4% in 2019. The Hungarian National Bank was founded in 1924, after the dissolution of the Austro-Hungarian Empire. It is currently focusing on price stability, with an inflation target of 3%.

Árpád Age
In the age of feudalism the key economic factor was land. The new economic and social orders created private ownership of land. There are three forms of existence: the royal, ecclesiastical and secular private estate. The royal estate of the Árpád dynasty had evolved from the tribal lands.

The origin of the secular private holdings dates back to the conquest tribal common estates, which are increasingly in charge of the society and grows over private ownership of the becoming leaders.

However, from the founding of the state the royal gift also entered the multiplying factors secular private property line. This organization developed a feudal estate, which had two elements: the ancient estate and the possessions which were awarded by Saint Stephen I, and then the royal donations. Béla III was the wealthiest European monarch of his time, according to a list of his revenues, but the reliability of the list is questioned. Over the holder unrestricted right granted by the latter lineal heir almost returned to the king. In the Order of the laws changed in 1351, which abolished the nobility's possessions for free disposal. It forbidden the nobility to sale their inherited land.

The Carpathian Basin was more suitable for agriculture than large livestock grazing, and therefore increased steadily in the former weight. In the 11th and 12th centuries natural farming and soil changer tillage systems met: grazing the animals, and they used the fertilized land until depletion. The most important tools for the agriculture were the plow and the ox.

Modern Age
The Hungarian economy prior to World War II was primarily oriented toward agriculture and small-scale manufacturing. Hungary's strategic position in Europe and its relative high lack of natural resources also have dictated a traditional reliance on foreign trade. For instance, its largest car manufacturer, Magomobil (maker of the Magosix), produced a total of a few thousand units. In the early 1920s the textile industry began to expand rapidly, by 1928 it became the most important industry in the foreign trade of Hungary exporting textile goods worth more than 60 million pengős in that year. Companies like MÁVAG exported locomotives to India and South-America, its locomotive no. 601 was the largest and most powerful in Europe at the time.

Post-war Hungarian communism
From the late 1940s, the Communist government started to nationalize the industry. At first, only factories with more than 100 workers were nationalized; later, this limit was reduced to only 10. In the agriculture, the government started a successful program of collectivization. From the early 1950s, more and more new factories were built. This rapid and forced industrialization followed the standard Stalinist pattern in an effort to encourage a more self-sufficient economy. Most economic activity was conducted by state-owned enterprises or cooperatives and state farms. In 1968, Stalinist self-sufficiency was replaced by the "New Economic Mechanism", which reopened Hungary to foreign trade, gave limited freedom to the workings of the market, and allowed a limited number of small businesses to operate in the services sector.

Although Hungary enjoyed one of the most liberal and economically advanced economies of the former Eastern Bloc, both agriculture and industry began to suffer from a lack of investment in the 1970s, and Hungary's net foreign debt rose significantly—from $1 billion in 1973 to $15 billion in 1993—due largely to consumer subsidies and unprofitable state enterprises. In the face of economic stagnation, Hungary opted to liberalize further by passing a joint venture law, instating an income tax, and joining the International Monetary Fund (IMF) and the World Bank. By 1988, Hungary had developed a two-tier banking system, and had enacted significant corporate legislation that paved the way for the ambitious market-oriented reforms of the post-communist years.

Transition to a market economy (1990-1995)
After the fall of communism, the former Eastern Bloc had to transition from a one-party, centrally planned economy to a market economy with a multi-party political system. With the collapse of the Soviet Union, the Eastern Bloc countries suffered a significant loss in both markets for goods, and subsidizing from the Soviet Union. Hungary, for example, "lost nearly 70% of its export markets in Eastern and Central Europe." The loss of external markets in Hungary left "800,000 unemployed people because all the unprofitable and unsalvageable factories had been closed." Another form of Soviet subsidizing that greatly affected Hungary after the fall of communism was the loss of social welfare programs. Because of the lack of subsidies and a need to reduce expenditures, many social programs in Hungary had to be cut in an attempt to lower spending. As a result, many people in Hungary suffered incredible hardships during the transition to a market economy. Following privatization and tax reductions on Hungarian businesses, unemployment suddenly rose to 12% in 1991 (it was 1.7% in 1990 ), gradually decreasing until 2001. Economic growth, after a fall in 1991 to −11.9%, gradually grew until the end of the 1990s at an average annual rate of 4.2%. With the stabilization of the new market economy Hungary experienced growth in foreign investment, with a "cumulative foreign direct investment totaling more than $60 billion since 1989."

The Antall government of 1990–94 began market reforms with price and trade liberation measures, a revamped tax system, and a nascent market-based banking system. By 1994, however, the costs of government overspending and hesitant privatization had become clearly visible. Cuts in consumer subsidies led to increases in the price of food, medicine, transportation services, and energy. Reduced exports to the former Soviet bloc and shrinking industrial output contributed to a sharp decline in GDP. Unemployment rose rapidly to about 12% in 1993. The external debt burden, one of the highest in Europe, reached 250% of annual export earnings, while the budget and current account deficits approached 10% of GDP. The devaluation of the currency (in order to support exports), without effective stabilization measures, such as indexation of wages, provoked an extremely high inflation rate, that in 1991 reached 35% and slightly decreased until 1994, growing again in 1995. In March 1995, the government of Prime Minister Gyula Horn implemented an austerity program, coupled with aggressive privatization of state-owned enterprises and an export-promoting exchange raw regime, to reduce indebtedness, cut the current account deficit, and shrink public spending. By the end of 1997 the consolidated public sector deficit decreased to 4.6% of GDP—with public sector spending falling from 62% of GDP to below 50%—the current account deficit was reduced to 2% of GDP, and government debt was paid down to 94% of annual export earnings.

The Government of Hungary no longer requires IMF financial assistance and has repaid all of its debt to the fund. Consequently, Hungary enjoys favorable borrowing terms. Hungary's sovereign foreign currency debt issuance carries investment-grade ratings from all major credit-rating agencies, although recently the country was downgraded by Moody's, S&P and remains on negative outlook at Fitch. In 1995 Hungary's currency, the Forint (HUF), became convertible for all current account transactions, and subsequent to OECD membership in 1996, for almost all capital account transactions as well. Since 1995, Hungary has pegged the forint against a basket of currencies (in which the U.S. dollar is 30%), and the central rate against the basket is devalued at a preannounced rate, originally set at 0.8% per month, the Forint is now an entirely free-floating currency. The government privatization program ended on schedule in 1998: 80% of GDP is now produced by the private sector, and foreign owners control 70% of financial institutions, 66% of industry, 90% of telecommunications, and 50% of the trading sector.

After Hungary's GDP declined about 18% from 1990 to 1993 and grew only 1%–1.5% up to 1996, strong export performance propelled GDP growth to 4.4% in 1997, with other macroeconomic indicators similarly improving. These successes allowed the government to concentrate in 1996 and 1997 on major structural reforms such as the implementation of a fully funded pension system (partly modelled after Chile's pension system with major modifications), reform of higher education, and the creation of a national treasury. Remaining economic challenges include reducing fiscal deficits and inflation, maintaining stable external balances, and completing structural reforms of the tax system, health care, and local government financing. Recently, the overriding goal of Hungarian economic policy has been to prepare the country for entry into the European Union, which it joined in late 2004.

Prior to the change of regime in 1989, 65% of Hungary's trade was with Comecon countries. By the end of 1997, Hungary had shifted much of its trade to the West. Trade with EU countries now comprises 80% of the total. Germany is Hungary's single most important trading partner. The US has become Hungary's sixth-largest export market, while Hungary is ranked as the 72nd largest export market for the U.S. Bilateral trade between the two countries increased 46% in 1997 to more than $1 billion. The U.S. has extended to Hungary most-favored-nation status, the Generalized System of Preferences, Overseas Private Investment Corporation insurance, and access to the Export-Import Bank.

With about $18 billion in foreign direct investment (FDI) since 1989, Hungary has attracted over one-third of all FDI in central and eastern Europe, including the former Soviet Union. Of this, about $6 billion came from American companies. Foreign capital is attracted by skilled and relatively inexpensive labor, tax incentives, modern infrastructure, and a good telecommunications system.

By 2006 Hungary's economic outlook had deteriorated. Wage growth had kept up with other nations in the region; however, this growth has largely been driven by increased government spending. This resulted in the budget deficit ballooning to over 10% of GDP and inflation rates predicted to exceed 6%. Nouriel Roubini, an economist in the Clinton administration, said that "Hungary is an accident waiting to happen."

Privatization in Hungary
In January 1990, the State Privatization Agency (SPA, Állami Vagyonügynökség) was established to manage the first steps of privatization. Because of Hungary's $21.2 billion foreign debt, the government decided to sell state property instead of distributing it to the people for free. The SPA was attacked by populist groups because several companies' management had the right to find buyers and discuss sale terms with them thus "stealing" the company. Another reason for discontent was that the state offered large tax subsidies and environmental investments, which sometimes cost more than the selling price of the company. Along with the acquisition of companies, foreign investors launched many "greenfield investments".

The center-right Hungarian Democratic Forum government of 1990–1994 decided to abolish agricultural co-operatives by splitting them up and giving machinery and land to their former members. The government also introduced a Recompensation Law which offered vouchers to people who had owned land before it was nationalized in 1948. These people (or their descendants) could exchange their vouchers for land previously owned by agricultural co-operatives, who were forced to give up some of their land for this purpose.

Small stores and retail businesses were privatized between 1990 and 1994, however, greenfield investments by foreign retail companies like Tesco, Cora and IKEA had a much bigger economic impact. Many public utilities, including the national telecommunications company Matáv, the national oil and gas conglomerate MOL Group, and electricity supply and production company MVM Group were privatized as well.

Though most banks were sold to foreign investors, the largest bank, National Savings Bank (OTP), remained Hungarian-owned. 20%–20% of the shares were sold to foreign institutional investors and given to the Social Security organizations, 5% were bought by employees, and 8% was offered at the Budapest Stock Exchange.

Hungary's economy since 1995
Reaching 1995, Hungary's fiscal indices deteriorated: foreign investment fell as well as judgement of foreign analysts on economic outlook. Due to high demand in import goods, Hungary also had a high trade deficit and budget gap, and it could not reach an agreement with the IMF, either. After not having a minister of finance for more than a month, prime minister Gyula Horn appointed Lajos Bokros as Finance Minister on 1 March 1995. He introduced a string of austerity measures (the "Bokros Package") on 12 March 1995 which had the following key points: one-time 9% devaluation of the forint, introducing a constant sliding devaluation, 8% additional customs duty on all goods except for energy sources, limitation of growth of wages in the public sector, simplified and accelerated privatization. The package also included welfare cutbacks, including abolition of free higher education and dental service; reduced family allowances, child-care benefits, and maternity payments depending on income and wealth; lowering subsidies of pharmaceuticals, and raising retirement age.

These reforms not only increased investor confidence, but they were also supported by the IMF and the World Bank, however, they were not welcome widely by the Hungarians; Bokros broke the negative record of popularity: 9% of the population wanted to see him in an "important political position" and only 4% were convinced that the reforms would "improve the country's finances in a big way"

In 1996, the Ministry of Finance introduced a new pension system instead of the fully state-backed one: private pension savings accounts were introduced, which were 50% social security based and 50% funded.

In 2006 Prime Minister Ferenc Gyurcsány was reelected on a platform promising economic "reform without austerity". However, after the elections in April 2006, the Socialist coalition under Gyurcsány unveiled a package of austerity measures which were designed to reduce the budget deficit to 3% of GDP by 2008.

Because of the austerity program, the economy of Hungary slowed down in 2007.

2008–2009 financial crisis
Declining exports, reduced domestic consumption and fixed asset accumulation hit Hungary hard during the financial crisis of 2008, making the country enter a severe recession of −6.4%, one of the worst economic contractions in its history.

On 27 October 2008, Hungary reached an agreement with the IMF and EU for a rescue package of US$25 billion, aiming to restore financial stability and investors' confidence.

Because of the uncertainty of the crisis, banks gave less loans which led to a decrease in investment. This along with price-awareness and fear of bankruptcy led to a fallback in consumption which then increased job losses and decreased consumption even further. Inflation did not rise significantly, but real wages decreased.

The fact that the euro and the Swiss franc are worth a lot more in forints than they were before affected a lot of people. According to The Daily Telegraph, "statistics show that more than 60 percent of Hungarian mortgages and car loans are denominated in foreign currencies". After the election in 2010 of the new Fidesz-party government of Prime Minister Viktor Orbán, Hungarian banks were forced to allow the conversion of foreign-currency mortgages to the forint. The new government also nationalized $13 billion of private pension-fund assets, which could then be used to support the government debt position.

Post 2008 recession Hungarian economy
The economy showed signs of recovery in 2011 with decreasing tax rates and a moderate 1.7 percent GDP growth.

From November 2011 to January 2012, all three major credit rating agencies downgraded Hungarian debt to a non-investment speculative grade, commonly called "junk status". In part this is because of political changes creating doubts about the independence of the Hungarian National Bank.

European Commission President José Manuel Barroso wrote to Prime Minister Viktor Orbán stating that new central bank regulations, allowing political intervention, "seriously harm" Hungary's interests, postponing talks on a financial aid package. Orbán responded "If we don't reach an agreement, we'll still stand on our own feet." The European Commission launched legal proceedings against Hungary on 17 January 2012. The procedures concern Hungary's central bank law, the retirement age for judges and prosecutors and the independence of the data protection office, respectively. One day later Orbán indicated in a letter his willingness to find solutions to the problems raised in the infringement proceedings. On 18 January he participated in plenary session of the European Parliament which also dealt with the Hungarian case. He said "Hungary has been renewed and reorganised under European principles". He also said that the problems raised by the European Union can be resolved "easily, simply and very quickly". He added that none of the EC's objections affected Hungary's new constitution.

Following the mild recession of 2012, the GDP picked up again from 2014, and based on the commission's Winter 2015 forecast it was projected to have accelerated to 3.3%. The more dynamic economic performance attributed to a moderately growing domestic demand and supported the growth of gross fixed capital formation. The surge (3.8% in the first half of 2014), however was only achieved via temporary measures and factors, such as the stepped-up absorption of EU-funds and the central bank's Funding for Growth Scheme, which subsidised loans for small-and medium-sized enterprises. The fundaments of growth didn't considerably change in 2015 as well – the government supported EU-fund transfers along with the moderately successful central bank loans of economic revitalization – fueled the fair GDP growth.

Hungarian economy during and after the covid pandemic
The Hungarian GDP, GDP per capita, living standards and wages have been steadily rising until the start of the Covid-19 pandemic, when just like the rest of Europe, the stats above tanked. GDP fell to $155 Billion, GDP PPP has fallen to $322 Billion, GDP per capita to $15,855, inflation slightly rose to 4.54%.

National debt rose considerably, to around 80% Debt-to-GDP from the previous 60–65%.

The country was hard hit, unemployment was also higher than average until 2021 when after the lockdowns have stopped. The GDP, GDP per capita, GDP PPP, unemployment and national debt have all recovered to and beyond their pre-covid values. On the other hand, inflation has risen to the record levels, reaching 24.5% in December 2022, being the highest in Europe.

Natural resources
Hungary's total land area is 93,030 km2 along with 690 km2 of water surface area which altogether makes up 1% of Europe's area.

Nearly 75% of Hungary's landscape consists of flat plains. Additional 20% of the country's area consists of foothills whose altitude is 400 m at the most; higher hills and water surface makes up the remaining 5%.

The two flat plains that take up three-quarters of Hungary's area are the Great Hungarian Plain and the Little Hungarian Plain. Hungary's most significant natural resource is arable land. About 83% of the country's total territory is suitable for cultivation; of this portion, 75% (around 50% of the country's area) is covered by arable land, which is an outstanding ratio compared to other EU countries. Hungary lacks extensive domestic sources of energy and raw materials needed for further industrial development.

19% of the country is covered by forests. These are located mainly in the foothills such as the North Hungarian and the Transdanubian Mountains, and the Alpokalja. The composition of forests is various; mostly oak or beech, but the rest include fir, willow, acacia and plane.

In European terms, Hungary's underground water reserve is one of the largest. Hence the country is rich in brooks and hot springs as well as medicinal springs and spas; as of 2003, there are 1250 springs that provide water warmer than 30 °C. 90% of Hungary's drinking water is mostly retrieved from such sources.

The major rivers of Hungary are the Danube and the Tisza. The Danube also flows through parts of Germany, Austria, Slovakia, Serbia, and Romania. It is navigable within Hungary for 418 km. The Tisza River is navigable for 444 km in the country. Hungary has three major lakes. Lake Balaton, the largest, is 78 km long and from 3 to 14 km wide, with an area of 592 km2. Lake Balaton is Central Europe's largest lake and a prosperous tourist spot and recreation area. Its shallow waters offer summer bathing and during the winter its frozen surface provides facilities for winter sports. Smaller bodies of water include Lake Velence (26 km2) in Fejér County and Lake Fertő (82 km2 within Hungary).

The waters of the country are in danger, since more water is going out of the county than in. In 2022, a severe drought which has impacted all of Europe is endangering among others, Lake Velence, Lake Balaton, the Danube and Tisza rivers. The flow of the aforementioned rivers have been modified in the late 19th century, and while it prevented larger floods and helped water transport, it has its downsides, such as the inability to support large-scale watering of crops, worsening the drought of 2022. Large-scale reforms and rebuilding of the Alföld water system is needed, but no such plans are being announced by the government as of 2022.

Transport

Hungary has 31,058 km of roads and motorways of 1,118 km. The total length of motorways has doubled in the last ten years with the most (106) kilometers built in 2006. Budapest is directly connected to the Austrian, Slovakian, Slovenian, Croatian, Romanian and Serbian borders via motorways.

Due to its location and geographical features, several transport corridors cross Hungary. Pan-European corridors no. IV, V, and X, and European routes no. E60, E71, E73, E75, and E77 go through Hungary. Thanks to its radial road system, all of these routes touch Budapest. There are five international, four domestic, four military and several non-public airports in Hungary. The largest airport is the Budapest Ferihegy International Airport (BUD) located at the southeastern border of Budapest. In 2008, the airport had 3,866,452 arriving and 3,970,951 departing passengers.

In 2006, the Hungarian railroad system was 7,685 km long, 2,791 km of it electrified.

Public utilities
Electricity is available in every settlement in Hungary.

Piped gas is available in 2873 settlements, 91.1% of all of them. To avoid gas shortages due to Ukrainian pipeline shutdowns like the one in January 2009, Hungary participates both in the Nabucco and the South Stream gas pipeline projects. Hungary also has strategical gas reserves: the latest reserve of 1.2 billion cubic meters was opened in October 2009.

In 2008, 94.9% of households had running water. Though it is the responsibility of municipal governments to provide people with healthy water supply, the Hungarian government and the European Union offer subsidies to those who wish to develop water supplies or sewage systems. Partly because of these subsidies, 71.3% of all dwellings are connected to the sewage system, up from 50,1% in 2000.

Internet penetration has been rising significantly over the past few years: the ratio of households having an internet connection has risen from 22.1% (49% of which was broadband) in 2005 to 48.4% (87.3% of which was broadband) in 2008.

The Ministry of Economy and Transport introduced the eHungary program in 2004 aiming to provide every person in Hungary with internet access by setting up "eHungary points" in public spaces like libraries, schools and cultural centers. The program also includes "the introduction of the eCounsellor network – a service through which professionals provide assistance for citizens in the effective usage of electronic information, services and knowledge".

Sectors
In 2022, the sector with the highest number of companies registered in Hungary is Services with 273,851 companies followed by Finance, Insurance, and Real Estate and Retail Trade with 113,153 and 87,237 companies respectively.

Agriculture

Agriculture accounted for 4.3% of GDP in 2008 and along with the food industry occupied roughly 7.7% of the labor force. These two figures represent only the primary agricultural production: along with related businesses, agriculture makes up about 13% of the GDP. Hungarian agriculture is virtually self-sufficient and due to traditional reasons export-oriented: exports related to agriculture make up 20–25% of the total. About half of Hungary's total land area is agricultural area under cultivation; this ratio is prominent among other EU members. This is due to the country's favorable conditions including continental climate and the plains that make up about half of Hungary's landscape. The most important crops are wheat, corn, sunflower, potato, sugar beet, canola and a wide variety of fruits (notably apple, peach, pear, grape, watermelon, plum etc.). Hungary has several wine regions producing among others the worldwide famous white dessert wine Tokaji and the red Bull's Blood. Another traditional world-famous alcoholic drink is the fruit brandy pálinka.

Mainly cattle, pigs, poultry and sheep are raised in the country. The livestock includes the Hungarian Grey Cattle which is a major tourist attraction in the Hortobágy National Park. An important component of the country's gastronomic heritage is foie gras with about 33,000 farmers engaged in the industry. Hungary is the second largest world producer and the biggest exporter of foie gras (exporting mainly to France).

Another symbol of Hungarian agriculture and cuisine is the paprika (both sweet and hot types). The country is one of the leading paprika producers of the world with Szeged and Kalocsa being the centres of production.

Hungary produced, in 2018, 7.9 million tons of maize (15th largest producer in the world); 5.2 million tons of wheat; 1.8 million tons of sunflower seed (8th largest producer in the world); 1.1 million tons of barley; 1 million tons of rapeseed (14th largest producer in the world); 941 thousand tons of sugar beet, which is used to produce sugar and ethanol; 674 thousand tons of apple; 539 thousand tons of grape; 330 thousand tons of potato; 330 thousand tons of triticale; in addition to smaller productions of other agricultural products.

Health care
Hungary has a tax-funded universal healthcare system, organized by the state-owned National Healthcare Fund (Országos Egészségbiztosítási Pénztár (OEP)). Health insurance is not directly paid for by children, mothers or fathers with baby, students, pensioners, people with socially poor background, handicapped people (including physical and mental disorders), priests and other church employees. Health in Hungary can be described with a rapidly growing life expectancy and a very low infant mortality rate (4.9 per 1,000 live births in 2012). Hungary spent 7.4% of the GDP on health care in 2009 (it was 7.0% in 2000), lower than the average of the OECD. Total health expenditure was 1,511 US$ per capita in 2009, 1,053 US$ governmental-fund (69.7%) and 458 US$ private-fund (30.3%) but has now risen to 2047 US$ per capita (as per 2018 data), roughly a 33% increase total, with the government funding 1439 US$ (70.3%) of the total versus the private funding 608 US$ (29.7%). This amount totals to 6.6% of the country's total GDP, roughly a percent decrease overall.

Industry
The main sectors of Hungarian industry are heavy industry (mining, metallurgy, machine and steel production), energy production, mechanical engineering, chemicals, food industry and automobile production. The industry is leaning mainly on processing industry and (including construction) accounted for 29.32% of GDP in 2008. Due to the sparse energy and raw material resources, Hungary is forced to import most of these materials to satisfy the demands of the industry. Following the transition to market economy, the industry underwent restructuring and remarkable modernization. The leading industry is machinery, followed by chemical industry (plastic production, pharmaceuticals), while mining, metallurgy and textile industry seemed to be losing importance in the past two decades. In spite of the significant drop in the last decade, food industry is still giving up to 14% of total industrial production and amounts to 7–8% of the country's exports.

Nearly 50% of energy consumption is dependent on imported energy sources. Gas and oil are transported through pipelines from Russia forming 72% of the energy structure, while nuclear power produced by the nuclear power station of Paks accounts for 53,6%.

Automobile production

Hungary is a favoured destination of foreign investors of automotive industry resulting in the presence of General Motors (Szentgotthárd), Magyar Suzuki (Esztergom), Mercedes-Benz (Kecskemét), and Audi factory (Győr) in Central Europe.

17% of the total Hungarian exports comes from the exports of Audi, Opel and Suzuki. The sector employs about 90,000 people in more than 350 car component manufacturing companies.

Audi has built the largest engine manufacturing plant of Europe (third largest in the world) in Győr becoming Hungary's largest exporter with total investments reaching over €3,300 million until 2007. Audi's workforce assembles the Audi TT, the Audi TT Roadster and the A3 Cabriolet in Hungary. The plant delivers engines to carmakers Volkswagen, Skoda, Seat and also to Lamborghini.

Daimler-Benz invests €800 million ($1.2 billion) and creates up to 2,500 jobs at a new assembly plant in Kecskemét, Hungary with capacity for producing 100,000 Mercedes-Benz compact cars a year.

Opel produced 80,000 Astra and 4,000 Vectra cars from March 1992 until 1998 in Szentgotthárd, Hungary. Today, the plant produces about half million engines and cylinder heads a year.

Services
The tertiary sector accounted for 64% of GDP in 2007 and its role in the Hungarian economy is steadily growing due to constant investments into transport and other services in the last 15 years. Located in the heart of Central-Europe, Hungary's geostrategic location plays a significant role in the rise of the service sector as the country's central position makes it suitable and rewarding to invest.

The total value of imports was 68.62 billion euros, the value of exports was 68.18 billion euros in 2007. The external trade deficit decreased by 12.5% since the previous year, easing down from 2.4 billion to 308 million euros in 2007. In the same year, 79% of Hungary's export and 70% of the imports were transacted inside the EU.

Tourism

Tourism employs nearly 150 thousand people and the total income from tourism was 4 billion euros in 2008. One of Hungary's top tourist destinations is Lake Balaton, the largest freshwater lake in Central Europe, with a number of 1.2 million visitors in 2008. The most visited region is Budapest, the Hungarian capital attracted 3.61 million visitors in 2008.

Hungary was the world's 24th most visited country in 2011. The Hungarian spa culture is world-famous, with thermal baths of all sorts and over 50 spa hotels located in many towns, each of which offer the opportunity of a pleasant, relaxing holiday and a wide range of quality medical and beauty treatments.

Currency
The currency of Hungary is the Hungarian forint (HUF, Ft) since 1 August 1946. A forint consists of 100 fillérs; however, since these have not been in circulation since 1999, they are only used in accounting.

There are six coins (5, 10, 20, 50, 100, 200) and six banknotes (500, 1000, 2000, 5000, 10,000 and 20,000). The 1 and 2 Forint coins were withdrawn in 2008, yet prices remained the same as stores follow the official rounding scheme for the final price. The 200 Forint note was withdrawn on 16 November 2009.

The fulfillment of the Maastricht criteria
1 Current EU member states that have not yet adopted the Euro, candidates and official potential candidates.

² No more than 1.5% higher than the 3 best-performing EU member states.

³ No more than 2% higher than the 3 best-performing EU member states.

4 Formal obligation for Euro adoption in the country EU Treaty of Accession or the Framework for membership negotiations.

5 Values from May 2008 report. To be updated each year.

Human capital
Education in Hungary is free and compulsory from the age of 5 to 16. The state provides free pre-primary schooling for all children, 8 years of general education and 4 years of upper secondary level general or vocational education. Higher education system follows the three-cycle structure and the credit system of the bologna process. Governments aim to reach European standards and encourage international mobility by putting emphasis on digital literacy, and enhancing foreign language studies: all secondary level schools teach foreign languages and at least one language certificate is needed for the acquisition of a diploma. Over the past decade, this resulted in a drastic increase in the number of people speaking at least one foreign language.

Hungary's most prestigious universities are:
 * Semmelweis University with five schools (medical school, dentistry, pharmacy, nursing and physical education).
 * Eötvös Loránd University (Eötvos Loránd Tudományegyetem, or ELTE, which is among the top 500 universities in the world )
 * Budapest University of Technology and Economics (Budapesti Műszaki és Gazdaságtudományi Egyetem, or BME) BME is considered the oldest Institutes of Technology of university rank and structure in the world. Established 1782.
 * Corvinus University of Budapest (Budapesti Corvinus Egyetem, or BCE)
 * Central European University (Közép-európai Egyetem, or CEU)
 * University of Pécs (Pécsi Tudományegyetem, or PTE)
 * University of Miskolc (Miskolci Egyetem or ME)
 * University of Szeged (Szegedi Tudományegyetem or SZTE) In 2010, the QS World University Rankings put the University of Szeged as 451st–500th among universities globally.
 * University of Debrecen (Debreceni Egyetem or DE)

Financial sources for education are mainly provided by the state (making up 5.1–5.3% of the annual GDP). In order to improve the quality of higher education, the government encourages contributions by students and companies. Another important contributor is the EU.

The system has weaknesses, the most important being segregation and unequal access to quality education. The 2006 PISA report concluded that while students from comprehensive schools did better than the OECD average, pupils from vocational secondary schools did much worse. Another problem is of the higher education's: response to regional and labour market needs is insufficient. Government plans include improving the career guidance system and establishing a national digital network that will enable the tracking of jobs and facilitate the integration into the labour market.

Brain drain
Hungary has one of the highest levels of citizen emigration inside the EU, particularly among young people. Of those immigrating 44% are under 30 and 77% are under 40. Most who leave the country and migrate to western or central Europe. Current immigration is exceedingly high, with 239,924 Hungarians immigrating abroad since 2010, peaking in 2015. Young women tend to be one of the main groups emigrating. The increase in immigration coincides with the Fidesz party coming to power in 2010. Common destination countries include Germany, Austria, and the United Kingdom.

Common reasons for immigrating include low wages when compared to the rest of the EU. According to the Hungarian Central Statistical Office the number of Hungarian students enrolled in university decreased by 25% from 2003 to 2013, roughly a third of those immigrating are college graduates leading to brain drain. Compounding this is that the Hungarian Forint tends to be less stable then the Euro and often suffers from high levels of inflation. Other than economic reasons, familial, social, and educational factors also contribute. The high rate of immigration coupled with low birth rates (1.59 births per woman) results in Hungary's aging and decreasing population.

Social stratification
As most post-communist countries, Hungary's economy is affected by its social stratification in terms of income and wealth, age, gender and racial inequalities.

Hungary's Gini coefficient of 0.269 ranks 11th in the world. The graph on the right shows that Hungary is close in equality to the world-leader Denmark. The highest 10% of the population gets 22.2% of the incomes. According to the business magazine Napi Gazdaság, the owner of the biggest fortune, 300 billion HUF, is Sándor Demján. On the other hand, the lowest 10% gets 4% of the incomes. Considering the standard EU indicators (Percentage of the population living under 60% of the per capita median income), 13% of the Hungarian population is stricken by poverty. According to the Human Development Report, the country's HPI-1 value is 2.2% (3rd among 135 countries), and its HDI value is 0.879 (43rd out of 182).

The fertility rate in Hungary, just like in many European countries, is very low: 1.34 children/women (205th in the world) Life expectancy at birth is 73.3 years., while the expected number of healthy years is 57.6 for females and 53.5 for males. The average life expectancy overall is 73.1 years.

Hungary's GDI (gender-related development index) value of 0.879 is 100% of its HDI value (3rd best in the world). 55.5% of the female population (between 15 and 64) participate in the labour force, and the ratio of girls to boys in primary and secondary education is 99%.

Ethnic inequality, which strikes primarily Roma in Hungary, is a serious problem. Although the definition of the Roma identity is controversial, qualitative studies prove that the Roma employment rate decreased significantly following the fall of Communism: due to the tremendous layoffs of unskilled workers during the transition years, more than one-third of Roma were excluded from the labour market. Therefore, this ethnic conflict is inherently interconnected with the income inequalities in the country – at least two-thirds of the poorest 300,000 people in Hungary are Romas. Furthermore, ethnic discrimination is outstandingly high, 32% of Romas experience discrimination when looking for work. Consequently, new Roma entrants to the labour market are rarely able to find employment, which creates a motivation deficit and further reinforces segregation and unemployment.

Institutional quality
Twenty years after the change of the regime, corruption remains a severe issue in Hungary. According to Transparency International Hungary, almost one-third of top managers claim they regularly bribe politicians. Most people (42%) in Hungary think that the sector most affected by bribery is the political party system. Bribery is common in the healthcare system in the form of gratitude payment–92% of all people think that some payment should be made to the head surgeon conducting a heart operation or an obstetrician for a child birth.

Another problem is the administrative burden: in terms of the ease of doing business, Hungary ranks 47th out of 183 countries in the world. The five days' time required to start a new business ranks 29th, and the country is 122nd concerning the ease of paying taxes.

In accordance with the theory of the separation of powers, the judicial system is independent from the legislative and the executive branches. Consequently, courts and prosecutions are not influenced by the government. However, the legal system is slow and overburdened, which makes proceedings and rulings lengthy and inefficient. Such a justice system is hardly capable of prosecuting corruption and protecting the country's financial interests.

Monetary policy
The Hungarian organization responsible for controlling the country's monetary policy is the Hungarian National Bank (Hungarian: Magyar Nemzeti Bank, MNB) which is the central bank in Hungary. According to the Hungarian Law of National Bank (which became operative in 2001. – LVIII. Law about The Hungarian National Bank ), the primary objective of MNB is to achieve and maintain price stability. This aim is in line with the European and international practice.

Price stability means achieving and maintaining a basically low, but positive inflation rate. This level is around 2–2.5% according to international observations, while the European Central Bank "aims at inflation rates of below, but close to 2% over the medium term". Since Hungary is in the process of catching up (Balassa-Samuelson effect), the long-term objective is a slightly higher figure, around 2.3–3.2%. Therefore, the medium term inflation target of the Hungarian National Bank is 3%.

Concerning the exchange rate system, the floating exchange rate system is in use since 26 February 2008, as a result of which HUF is fluctuating in accordance with the effects of the market in the face of the reference currency, the euro.

The chart on the right shows forint exchange rates for the British pound (GBP), euro (EUR), Swiss franc (CHF), and the U.S. dollar (USD) from June 2008 to September 2009. It indicates that a relatively strong forint weakened since the beginning of the financial crisis, and that its value has recently taken an upward turn.

Compared to the euro the forint was at peak on 18 June 2008 when 1000 Ft was €4.36 and €1 was 229.11Ft. The forint was worth the least on 6 March 2009; this day 1000 Ft was €3.16 and €1 was 316Ft).

Compared to USD, most expensive/cheapest dates are 22 June 2008 and 6 March 2009 with 1000HUF/USD rates 6.94 and 4.01 respectively.

On 24 March 2015 the Euro was at 299.1450 and USD was at 274.1650,

Fiscal policy
[[File:Hungary bonds.webp|thumb|300px|right|Hungary bonds

]] In Hungary, state revenue makes up 44% and expenditure makes up 45% of the GDP which is relatively high compared to other EU members. This can be traced back to historical reasons such as socialist economic tradition as well as cultural characteristics that endorse paternalist behaviour on the state's part, meaning that people have a habitual reflex that make them call for state subsidies. Some economists dispute this point, claiming that expenditure ran up to today's critical amount from 2001, during two left-wing government cycles.

Along with joining the EU the country undertook the task of joining the Eurozone as well. Therefore, the Maastricht criteria which forms the condition of joining the Eurozone acts as an authoritative guideline to Hungarian fiscal politics. Although there has been remarkable progress, recent years' statistics still point at significant discrepancies between the criteria and fiscal indices. The target date for adapting the Euro has not been fixed, either.

General government deficit has shown a drastic decline to −3.4% (2008) from −9.2% (2006). According to an MNB forecast however, until 2011, the deficit will by a small margin fall short of the 3.0% criterion.

Another criterion that is found lacking is the ratio of gross government debt to GDP which, since 2005, exceeds the allowed 60%. According to an ESA95 figure, in 2008 the ratio increased from 65.67% to 72.61%, which primarily results from the requisition of an IMF-arranged financial assistance package.

Hungary's balance of payments on its current account has been negative since 1995, around 6–8% in the 2000s reaching a negative peak 8.5% in 2008. Still, current account deficit will expectedly decrease in the following period, as imports will diminish compared to exports as an effect of the financial crisis.

Tax system
In Hungary, the 1988 reform of taxes introduced a comprehensive tax system which mainly consists of central and local taxes, including a personal income tax, a corporate income tax and a value added tax. Among the total tax income the ratio of local taxes is solely 5% while the EU average is 30%. Until 2010, the taxation of an individual was progressive, determining the tax rate based on the individual's income: with earning up to 1,900,000 forints a year, the tax was 18%, the tax on incomes above this limit was 36% since 1 July 2009.

Based on the new one-rate tax regime introduced January 2011, the overall tax rate for all income-earnings bands has been 16%. According to the income-tax returns of 2008, 14,6% of taxpayers was charged for 64,5% of the total tax burdens. Before the new corporate income tax regime, the corporate tax was fixed at 16% of the positive rateable value, with an additional tax called solidarity tax of 4%, the measure of which is calculated based on the result before tax of the company (the solidarity tax has been in use since September, 2006). The actual rateable value might be different is the two cases. From January 2011, under the new corporate income tax regime the tax rate was divided into two parts (i) corporations having income before tax below 500 million HUF (appr. USD 2.5 million) was lowered to 10% and (ii) 16% remained for all other companies until 2013. After this, the unified corporate income tax rate will be 10%, irrespectively from the size of the net income before tax. In January 2017, corporate tax was unified at a rate of 9% – the lowest in the European Union. The rate of value added tax in Hungary is 27%, the highest in Europe, since 1 January 2012.

Miscellaneous data
The following table shows the main economic indicators in 1980–2021. Inflation under 2% is in green.

Households with access to fixed and mobile telephony Quick facts – Telecommunication market in Hungary – Hungarian Statistical office (3Q 2011)
 * number of households – 4,001,976 (October 2011)
 * number of landline telephones – 2,884,000 (October 2011)
 * landline telephones / households – 72.1% (October 2011)
 * landline telephones / inhabitants – 28.9% (October 2011)
 * number of mobile telephone subscriptions – 11,669,000 (October 2011)
 * mobile telephone subscriptions / inhabitants (Mobile telephone penetration) – 117.1% (December 2011)

Broadband penetration rate
 * number of fixed broadband – 2,111,967 (October 2011)
 * number of mobile broadband – 1,872,178 (October 2011)
 * fixed broadband per households – 52.8% (December 2011)
 * mobile broadband per households – 43.4% (January 2012)

Individuals using computer and internet
 * computer – 65% (2009)
 * internet – 62% (2009)

External relations
Hungary joined the European Union on 05/01/2004 after a successful referendum among the EU-10. The EU's free trade system helps Hungary, as it is a relatively small country and thus needs export and import.

After the accession to the EU, Hungarian workers could immediately go to work to Ireland, Sweden and the United Kingdom. Other countries imposed restrictions.

In 2007, 25% of all exports of Hungary were of high technology, which is the 5th largest ratio in the European Union after Malta, Cyprus, Ireland, and the Netherlands. The EU10 average was 17.1% and the Eurozone average was 16% in 2007. On 15 July 2024, The European Commission will boycott informal meetings hosted by Hungary during its EU presidency, due to Prime Minister Viktor Orban's unauthorized meetings with foreign leaders about Ukraine. Orban's actions, including visits to Russia and China, have angered EU partners, who emphasized he was not acting on behalf of the bloc. Hungary criticized the decision as politically biased.

title: Economy of Hungary


text:
Transport in Hungary

Transport in Hungary relies on several main modes, including transport by road, rail, air and water.

Roads

Hungary has a total of 159568 km of public roads, of which 70050 km are paved (including 1481 km of motorways, as of 2016); and 89518 km are unpaved (2005 etc.):

Hungarian road categories are as follows:
 * Gyorsforgalmi út (controlled-access highway):
 * Autópálya (motorway): 2+2 travel lanes and 1+1 emergency lane, central reservation, no at-grade intersections, speed limit 130 km/h
 * Gyorsút (high-speed highway): 2+2 travel lanes, central reservation, few at-grade intersections, speed limit 110 km/h
 * Autóút (expressway): 2+2, 2+1 or 1+1 travel lanes, central reservation, some at-grade intersections, speed limit 110 km/h
 * Elsőrendű főút (primary arterial road or primary main road) (with one-digit number, e.g. 6-os főút)
 * Másodrendű főút (secondary main road) (with two or three digits, e.g. 57-es főút)
 * Helyi út (local road) (with three or more digits, e.g. 4519-es közút)

Motorways and expressways
Hungarian motorways and expressways are part of the national road network. As of October 2016, there are 1481 km of controlled-access highways.

Motorways (autópályák, singular - autópálya) in Hungary: M1 | M3 | M4 | M5 | M6 | M7 | M8 | M15 | M19 | M30 | M31 | M35 | M43 | M60

Expressways (autóutak, singular - autóút) in Hungary: M0 | M2 | M9 | M51 | M70 | M85 | M86

New motorway sections are being added to the existing network, which already connects many major economically important cities to the capital.

Bus transport
Bus transport between municipalities was provided by Volán Companies, twenty-four bus companies founded in 1970 and named after the regions they served. They also provided local transport in cities and towns that did not have their own public transport company (all cities except for Budapest, Miskolc, Pécs, Kaposvár and also Debrecen after 2009), and operated bus lines in cities where the local company operated only tram and trolley bus lines (Szeged and Debrecen, the latter until 2009, when DKV took over the bus lines). In early 2015 the 24 companies were organized into seven regional companies.

Railways

Note: Hungary and Austria jointly manage the cross-border standard-gauge railway between Győr–Sopron–Ebenfurt (GySEV/ROeEE), a distance of about 101 km in Hungary and 65 km in Austria.

In Budapest, the three main railway stations are the Eastern (Keleti), Western (Nyugati) and Southern (Déli), with other outlying stations like Kelenföld. Of the three, the Southern is the most modern but the Eastern and the Western are more decorative and architecturally interesting.

Other important railway stations countrywide include Szolnok (the most important railway intersection outside Budapest), Tiszai Railway Station in Miskolc and the stations of Pécs, Győr, Debrecen, Szeged and Székesfehérvár.

The only city with an underground railway system is Budapest with its Metro.

In Budapest there is also a suburban rail service in and around the city, operated under the name HÉV.

Rail system

 * Total: 7,606 km
 * Standard gauge: 7,394 km gauge (2,911 km electrified; 1,236 km double track)
 * Broad gauge: 36 km gauge
 * Narrow gauge: 176 km gauge (1998)

Rail links with adjacent countries

 * Same gauge:
 * Austria (6 line)
 * Croatia (3 line)
 * Romania (5 line)
 * Serbia (2 line)
 * Slovakia (10 line)
 * Slovenia (1 line)
 * Break-of-gauge – /
 * Ukraine (2 line)

Airports

There are 43-45 airports in Hungary, including smaller, unpaved airports, too. The five international airports are Budapest-Liszt Ferenc, Debrecen Airport, Hévíz–Balaton International Airport (previously Sármellék, also called FlyBalaton for its proximity to Lake Balaton, Hungary's number one tourist attraction), Győr-Pér and Pécs-Pogány (as of 2015. there are no regular passenger flights from Győr-Pér and Pécs-Pogány). Malév Hungarian Airlines ceased operations in 2012.

Total: 20 (1999 est.)
 * Airports with paved runways:
 * Over 3,047 m: 2
 * 2,438 to 3,047 m: 8
 * 1,524 to 2,437 m: 4
 * 914 to 1,523 m: 1
 * Under 914 m: 1

Total: 27 (1999 est.)
 * Airports with unpaved runways
 * 2,438 to 3,047 m: 3
 * 1,524 to 2,437 m: 5
 * 914 to 1,523 m: 12
 * Under 914 m: 7

International airports
List of airports in Hungary; The following are the largest airports in Hungary (In descending order for 2015):
 * Budapest Ferenc Liszt International Airport (BUD)
 * Debrecen International Airport (DEB)
 * Hévíz–Balaton Airport (SOB)
 * Győr-Pér International Airport (QGY)
 * Pécs-Pogány International Airport (PEV)

Heliports
Hungary has five heliports.

Waterways
1,373 km permanently navigable (1997)

Ports and harbors
The most important port is Budapest, the capital. Other important ones include Dunaújváros and Baja.

Ports on the Danube:
 * Győr-Gönyű (Port of Győr)
 * Komárom
 * Budapest (Port of Csepel)
 * Dunaújváros (Port of Dunaújváros)
 * Dunavecse
 * Madocsa
 * Paks
 * Fadd-Dombori
 * Bogyiszló
 * Baja (Port of Baja)
 * Mohács (Port of Mohács)

Ports on the Tisza:
 * Szeged (Port of Szeged)

Merchant marine

 * Total: 2 ships (with a volume of or over) totaling /
 * Ships by type: cargo ship 2 (1999 est.)

Transport companies of cities

 * BKK (Budapest) (buses, trams, trolley buses and metro)
 * DKV Zrt. (Debrecen) (buses, trams & trolley buses)
 * MVK Zrt. (Miskolc) (buses and trams)
 * SzKT Kft. (Szeged) (trams and trolley buses only; buses belong to Volánbusz)
 * Tüke Busz Zrt. (Pécs) (buses)
 * KT Zrt. (Kaposvár) (buses)
 * T-busz Kft. (Tatabánya) (buses)
 * V-busz Kft. (Veszprém) (buses)
 * KeKo (Kecskemét) (buses)

In the rest of the cities and towns local transport is provided by Volánbusz companies that also provide intercity bus lines.

Metro

The Budapest Metro (Budapesti metró) is the rapid transit system in the Hungarian capital Budapest. Its line 1 (opened in 1896) is the oldest electrified underground railway on the European continent. The second (red) line was opened in 1970, third (blue) line was opened in 1976, the newest line is the fourth (green), it was opened in 2014.

Trams
The busiest traditional city tram line in the world is still route 4/6 in Budapest, where 50-meter long trams run at 120 to 180 second intervals at peak time and are usually packed with people. A part of this route is the same as where electric trams made their world first run in 1887. Since the 2000s, the Budapest tram network has been improved, by ordering new trams (Combino Supra and CAF Urbos 3) as well as extending some lines (such as line 1 to Kelenföld railway station).

Cities with tram lines

 * Budapest (since November 28, 1887)
 * Miskolc (since July 10, 1897)
 * Szeged (since October 1, 1908)
 * Debrecen (since March 16, 1911)
 * Hódmezővásárhely (since November 29, 2021)

Cities with former tram lines

 * Szombathely (1897–1974)
 * Sopron (1900–1923)
 * Nyíregyháza (1905–1969)
 * Pécs (1913 – August 31, 1960)

There were some towns, where narrow gauge railways were used as tram lines or interurban lines (for example: Sárospatak, Sátoraljaújhely, Békéscsaba, Békés, Cegléd). These lines were closed in the 1970s.

Trolleybus
Trolleybuses can be found in three cities: Budapest, Debrecen and Szeged.

Pipelines

 * Crude oil: 1,204 km
 * Natural gas: 4,387 km (1991)

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/

title: Transport in Hungary


text:
Hungarian Defence Forces

The Hungarian Defence Forces (Magyar Honvédség, ) is the national defence force of Hungary. Since 2007, the Hungarian Armed Forces is under a unified command structure. The Ministry of Defence maintains the political and civil control over the army. A subordinate Joint Forces Command is coordinating and commanding the HDF corps. In 2020, the armed forces had 22,700 personnel on active duty. In 2019, military spending was $1.904 billion, about 1.22% of the country's GDP, well below the NATO target of 2%. In 2016, the government adopted a resolution in which it pledged to increase defence spending to 2.0% of GDP and the number of active personnel to 37,650 by 2026.

Military service is voluntary, though conscription may occur in wartime. In a significant move for modernization, Hungary decided in 2001 to buy 14 JAS 39 Gripen fighter aircraft for about 800 million EUR. Hungary bought two used Airbus A319 and two Falcon 7X transport aircraft. Three C-17 III Globemaster transport aircraft are operating from Pápa Air Base under Hungarian nationality mark but are maintained by the NATO Heavy Airlift Wing (HAW). An intensive modernization program started in 2016 under the name "Zrínyi 2026". New helicopters, tanks, IFVs and artillery equipment were purchased beside others. Hungarian National Cyber Security Center was re-organized in 2016.

In 2016, the Hungarian military has about 700 troops stationed in foreign countries as part of international peacekeeping forces, including 100 HDF troops in the NATO-led ISAF force in Afghanistan, 210 Hungarian soldiers in Kosovo under command of KFOR, and 160 troops in Bosnia and Herzegovina. Hungary sent a 300-strong logistics unit to Iraq in order to help the US occupation with armed transport convoys, though public opinion opposed the country's participation in the war. One soldier was killed in action by a roadside bomb in Iraq.

During the Hungarian Revolution of 1848, the HDF drove Habsburg forces from the country in the Spring Campaign of 1849, but was defeated by an Austro-Russian offensive in the summer. The Royal Hungarian Honvéd was established in 1868. During World War I out of the eight million men mobilized by Austria-Hungary, over one million died. Conscription was introduced on a national basis in 1939. The peacetime strength of the Royal Hungarian Army grew to 80,000 men organized into seven corps commands. During World War II the Hungarian Second Army was destroyed on the banks of the Don River in December 1942 in the Battle of Stalingrad. During the Socialist and the Warsaw Pact era (1947–1989), the entire 200,000 strong Southern Group of Forces was garrisoned in Hungary, complete with artillery, tank regiments, air force and missile troops with nuclear weapons.

Flag and emblem
The central element of the emblem of the Hungarian Defence Forces is the Turul bird with extended wings holding the sword of King Saint Stephen in its claws. The element is surrounded by a turkey oak branch on the right and an olive branch on the left. At the meeting point of the branches is the "Hungarian Defense Shield" in the national color. The inscription "A HAZÁÉRT" can be read at the top as "for the homeland", and "MAGYAR HONVÉDSÉG" can be read in a semicircle at the bottom as "Hungarian Defence Forces". The flag of the Hungarian Defence Forces is white, and the emblem is placed in the middle of the flag.

Ancient, medieval, and early modern military
The Hungarian tribes of Árpád vezér who came to settle in the Carpathian Basin were noted for their fearsome light cavalry, which conducted frequent raids throughout much of Western Europe (as far as present-day Spain), maintaining their military supremacy with long range and rapid-firing reflex bows. Not until the introduction of well-regulated, plate-armored knight heavy cavalry could German emperors stop the Hungarian armies.

During the Árpáds the light cavalry based army was transformed slowly into a western-style one. The light cavalry lost its privileged position, replaced by a feudal army formed mainly from heavy cavalry.

The Hungarian field armies were drawn up into an articulated formation (as it happened in Battle of Przemyśl (1099), Battle at Leitha (1146), Battle of Morvamező (1278), (1349), in three main battle (formation) (1146, 1278, 1349). According to the contemporary sources and later speculations, the first line was formed by light cavalry archers (Battle of Oslava (1116, 1146, 1260, 1278). Usually, they started the battle followed by a planned retreat (1116, 1146), Battle of Kressenbrunn (1260). The major decisive battles of the Hungarian army were placed in the second or third lines consisted mainly of the most valuable parts of the army – in general heavy cavalry (1146, 1278, 1349).

The commanders of the Hungarian Kingdom's army used different tactics, based on a recognition of their own and the enemies' (Holy Roman Empire, Pechenegs, Uzes, Cumans, Mongols, Byzantine Empire) abilities and deficiencies.

The Hungarian knight army had its golden age under King Louis the Great, who himself was a famed warrior and conducted successful campaigns in Italy due to family matters (his younger brother married Joanna I, Queen of Naples who murdered him later.) King Matthias Corvinus maintained very modern mercenary-based royal troops, called the Black Army. King Matthias favoured ancient artillery (catapults) as opposed to cannons, which were the favourite of his father, Johannes Hunyadi, former Regent of Hungary.

During the Ottoman invasion of Central Europe (between late 14th century and circa 1700) Hungarian soldiers protected fortresses and launched light cavalry attacks against the Turks (see Hungarian Hussars). The northern fortress of Eger was famously defended in the autumn of 1552 during the 39-day Siege of Eger against the combined force of two Ottoman armies numbering circa 120,000 men and 16 ultra-heavy siege guns. The victory was very important, because two much stronger forts of Szolnok and Temesvár had fallen quickly during the summer. Public opinion attributed Eger's success to the all-Hungarian garrison, as the above two forts have fallen due to treason by the foreign mercenaries manning them. In 1596, Eger fell to the Ottomans for the same reason.

In the 1566 Battle of Szigetvár, Miklós Zrínyi defended Szigetvár for 30 days against the largest Ottoman army ever seen up to that day, and died leading his remaining few soldiers on a final suicide charge to become one of the best known national heroes. His great-grandson, Miklós Zrínyi, poet and general became one of the better-known strategists of the 1660s. In 1686, the capital city Buda was freed from the Ottomans by an allied Christian army composed of Austrian, Hungarian, and Western European troops, each roughly one-third of the army. The Habsburg empire then annexed Hungary.

Habsburg Hungarian military

Under Habsburg rule, Hungarian Hussars rose to international fame and served as a model for light cavalry in many European countries. During the 18th and 19th centuries hundreds of thousands of forcibly enrolled Hungarian males served 12 years or more each as line infantry in the Austrian Imperial Army.

Two independence wars interrupted this era, that of Prince Francis II Rákóczi between 1703 and 1711 and that of Lajos Kossuth in 1848–1849. A July 11, 1848 act of parliament in Budapest called for the formation of an army, the Honvédség, of 200,000 which would use the Magyar language of command. It was to be formed around already extant imperial units, twenty battalions of infantry, ten hussar regiments, and two regiments of Székely from the Transylvanian Military Frontier. They were further joined by eight companies of two Italian regiments stationed in Hungary and parts of the Fifth Bohemian Artillery Regiment.

In 1848–1849 the Honvédség (mostly made up of enthusiastic patriots with no prior military training) achieved incredible successes against better-trained and -equipped Austrian forces, despite the obvious advantage in numbers on the Austrian side. The Winter Campaign of Józef Bem and the Spring Campaign of Artúr Görgey are to this day taught at prestigious military schools around the globe, including at West Point Academy in the United States. Having suffered initial setbacks, including the loss of Pest-Buda, the Honvéd took advantage of the Austrians' lack of initiative and re-formed around the Debrecen-based Kossuth government. The Hungarians advanced again and by the end of spring 1849, Hungary was basically cleared of foreign forces, and would have achieved independence, were it not for the Russian intervention. At the request of the Austrian emperor Franz Joseph, the Russians invaded with a force of 190,000 soldiers – against the Honvédség's 135,000 – and decisively defeated Bem's Second Army in Transylvania, opening the path into the heart of Hungary. This way the Austrian-Russian coalition outnumbered Hungarian forces 3:1, which led to Hungary's surrender at Világos on 13 August 1849. Sándor Petőfi, the great Hungarian poet, went missing in action in the Battle of Segesvár, against invading Russian forces.

In April 1867, the Austro-Hungarian Empire was established. Franz Josef, the head of the ancient Habsburg dynasty, was recognized as both Emperor of Austria and King of Hungary. Nevertheless, the issue of what form the Hungarian military would take remained a matter of serious contention between Hungarian patriots and Austrian leaders. As the impasse threatened the political union, Emperor Franz Josef ordered a council of generals in November of the same year. Ultimately, the leaders resolved on the following solution: in addition to the joint (k.u.k.) army, Hungary would have its own defence force, whose members would swear their oath to the King of Hungary (who was also Emperor of Austria) and the national constitution, use the Hungarian language of command, and display their own flags and insignia. (Austria would also form its own parallel national defence force, the Landwehr.) As a result of these negotiations, on 5 December 1868, the Royal Hungarian Landwehr (Magyar Kiralyi Honvédség, or Defence Force) was established.

The Honvédség was usually treated generously by the Diet in Budapest. By 1873 it already had over 2,800 officers and 158,000 men organized into eighty-six battalions and fifty-eight squadrons. In 1872, the Ludovika Academy officially began training cadets (and later staff officers). Honvédség units engaged in manoeuvres and were organized into seven divisions in seven military districts. While artillery was not allowed, the force did form batteries of Gatling guns in the 1870s.

In the midst of trouble between the imperial government and the parliament in 1906, the Honvédség was further expanded and finally received its own artillery units. In this form, the force approached the coming world war in most respects as a truly "national" Hungarian army.

World War I
Hungarian soldiers "fought with distinction" on every front contested by Austria-Hungary in the First World War. Honvédség units (along with the Austrian Landwehr) were considered fit for front line combat service and equal to those of the joint forces K.U.K. army. They saw combat especially on the Eastern Front and at the Battles of the Isonzo on the Italian Front. Out of the eight million men mobilized by Austria-Hungary, over one million died. Hungarians as a national group were second only to German Austrians in their share of this burden, experiencing twenty-eight war deaths for every thousand persons.

After the collapse of the Austro-Hungarian empire in late 1918, the Red Army of the Hungarian communist state (Hungarian Soviet Republic) conducted successful campaigns to protect the country's borders. However, in the Hungarian–Romanian War of 1919 Hungary came under occupation by the Romanian, Serbian, American, and French troops, as after four years of extensive fighting, the country lacked both the necessary manpower and equipment to fend off foreign invaders.

In accordance with the Treaty of Bucharest, upon leaving, the Romanian army took substantial compensation for reparations. This included agricultural goods and industrial machinery as well as raw materials. The Trianon Treaty limited the Hungarian National Army to 35,000 men and forbade conscription. The army was forbidden to possess tanks, heavy armor, or an air force.

Mid-twentieth century
On 9 August 1919, Admiral Miklós Horthy united various anti-communist military units into an 80,000-strong National Army (Nemzeti Hadsereg). On 1 January 1922, the National Army was once again redesignated the Royal Hungarian Army.

During the 1930s and early 1940s, Hungary was preoccupied with the regaining the vast territories and huge amount of population lost in the Trianon peace treaty at Versailles in 1920. This required strong armed forces to defeat the neighbouring states and this was something Hungary could not afford. Instead, the Hungarian Regent, Admiral Miklós Horthy, made an alliance with Nazi Germany. In exchange for this alliance and via the First and Second Vienna Awards, Hungary received back parts of its lost territories from Yugoslavia, Romania, and Czechoslovakia. Hungary was to pay dearly during and after World War II for these temporary gains.

On 5 March 1938, Prime Minister Kálmán Darányi announced a rearmament program (the so-called Győr Programme, named after the city where it was announced to the public). Starting 1 October, the armed forces established a five-year expansion plan with Huba I-III revised orders of battle. Conscription was introduced on a national basis in 1939. The peacetime strength of the Royal Hungarian Army grew to 80,000 men organized into seven corps commands.

In March 1939, Hungary launched an invasion of the newly formed Slovak Republic. Both the Royal Hungarian Army and the Royal Hungarian Air Force fought in the brief Slovak-Hungarian War. This invasion was launched to reclaim a part of the Slovakian territory lost after World War I.

On 1 March 1940, Hungary organized its ground forces into three field armies. The Royal Hungarian Army fielded the Hungarian First Army, the Hungarian Second Army, and the Hungarian Third Army. With the exception of the independent "Fast Moving Army Corps" (Gyorshadtest), all three Hungarian field armies were initially relegated to defensive and occupation duties within the regained Hungarian territories.

World War II
In November 1940, Hungary signed the Tripartite Pact and became a member of the Axis with Nazi Germany and Fascist Italy.

In April 1941, in order to regain territory and because of the German pressure, Hungary allowed the Wehrmacht to cross her territory in order to launch the invasion of Yugoslavia. The Hungarian foreign minister, Pál Teleki who wanted to maintain a pro-allied neutral stance for Hungary, could no longer keep the country out of the war, as the British Foreign Secretary Anthony Eden had threatened to break diplomatic relations with Hungary if it did not actively resist the passage of German troops across its territory, and General Henrik Werth, chief of the Hungarian General Staff made a private arrangement - unsanctioned by the Hungarian government - with the German High Command for the transport of the German troops across Hungary. Pál Teleki, no longer being able to stop the unfolding events, committed suicide on April 3, 1941, and Hungary joined the war on April 11 after the proclamation of the Independent State of Croatia.

After the controversial Kassa attack, elements of the Royal Hungarian Army joined the German invasion of the Soviet Union, Operation Barbarossa, one week later than the start of the operation. In spite of the arguments made that Hungary (unlike Romania) had no territorial claims in the Soviet Union, the fateful decision was made to join the war in the East. In the late summer of 1941, the Hungarian "Rapid Corps" (Gyorshadtest), alongside German and Romanian army groups, scored a huge success against the Soviets at the Battle of Uman. A little more than a year later and contrasting sharply with the success at Uman, was the near total devastation of the Hungarian Second Army on banks of the Don River in December 1942 during the Battle for Stalingrad.

During 1943, the Hungarian Second Army was re-built. In late 1944, as part of Panzerarmee Fretter-Pico, it participated in the destruction of a Soviet mechanized group at the Battle of Debrecen. But this proved to be a Pyrrhic victory. Unable to re-build again, the Hungarian Second Army was disbanded towards the end of 1944.

To keep Hungary as an ally, the Germans launched Operation Margarethe and occupied Hungary in March 1944. However, during the Warsaw Uprising, Hungarian troops refused to participate.

On 15 October 1944, the Germans launched Operation Panzerfaust and forced Horthy to abdicate. Pro-Nazi Ferenc Szálasi was made prime minister by the Germans.

On 28 December 1944, a provisional government under the control of the Soviet Union was formed in liberated Debrecen with Béla Miklós as its prime minister. Miklós was the commander of the Hungarian First Army, but most of the First Army sided with the Germans and most of what remained of it was destroyed about 200 kilometres north of Budapest between 1 January and 16 February. The pro-Communist government formed by Miklós competed with the pro-Nazi government of Ferenc Szálasi. The Germans, Szálasi, and pro-German Hungarian forces loyal to Szálasi fought on. On 20 January 1945, representatives of the provisional government of Béla Miklós signed an armistice in Moscow. But forces loyal to Szálasi still continued to fight on.

The Red Army, with assistance from Romanian army units, completed the encirclement of Budapest on 29 December 1944 and the Siege of Budapest began. On 2 February 1945, the strength of the Royal Hungarian Army was 214,465 men, but about 50,000 of these had been formed into unarmed labor battalions. The siege of Budapest ended with the surrender of the city on 13 February. But, while the German forces in Hungary were generally in a state of defeat, the Germans had one more surprise for the Soviets.

In early March 1945, the Germans launched the Lake Balaton Offensive with support from the Hungarians. This offensive was almost over before it began. By 19 March 1945, Soviet troops had recaptured all the territory lost during a 13-day German offensive.

After the failed offensive, the Germans in Hungary were defeated. Most of what remained of the Hungarian Third Army was destroyed about 50 kilometres west of Budapest between 16 March and 25 March 1945. Officially, Soviet operations in Hungary ended on 4 April 1945 when the last German troops were expelled.

Some pro-fascist Hungarians like Szálasi retreated with the Germans into Austria and Czechoslovakia. During the very last phase of the war, Fascist Hungarian forces fought in Vienna, Breslau, Küstrin, and along the Oder River. On 7 May 1945, General Alfred Jodl, the German Chief of Staff, signed the document of unconditional surrender for all German forces. Jodl signed this document during a ceremony in France. On 8 May, in accordance with the wishes of the Soviet Union, the ceremony was repeated in Germany by Field Marshal Wilhelm Keitel. On 11 June, the Allies agreed to make 9 May 1945 the official "Victory in Europe" day. Szálasi and many other pro-fascist Hungarians were captured and ultimately returned to Hungary's provisional government for trial.

Warsaw Pact
During the Socialist and the Warsaw Pact era (1947–1989), the Soviet Southern Group of Forces, 200,000 strong, was garrisoned in Hungary, complete with artillery, tank regiments, air force and missile troops (with nuclear weapons). It was, by all means, a very capable force but which had little contact with the local population. Between 1949 and 1955 there was also a huge effort to build a big Hungarian army. All procedures, disciplines, and equipment were exact copies of the Soviet Armed Forces in methods and material, but the huge costs collapsed the economy by 1956.

During the autumn 1956 revolution, the army was divided. When the opening demonstrations on 23 October 1956 were fired upon by ÁVH secret policemen, Hungarian troops sent to crush the demonstrators instead provided their arms to the latter or joined them outright. While most major military units in the capital were neutral during the fighting, thousands of rank-and-file soldiers went over to the Revolution or at least provided the revolutionaries with arms. Many significant military units went over to the uprising in full, such as the armored unit commanded by Colonel Pál Maléter which joined forces with the insurgents at the Battle of the Corvin Passage. However, there were 71 recorded clashes between the people and the army between 24 and 29 October in fifty localities; these were typically either defending certain military targets from rebel attack or fighting the insurgents outright, depending on the commander. When the Soviets crushed the Revolution on 4 November, the Army put up sporadic and disorganized resistance; lacking orders, many of their divisions were simply overpowered by the invading Soviets.

After the Revolution was crushed in Budapest, the Soviets took away most of the Hungarian People's Army's equipment, including dismantling the entire Hungarian Air Force, because a sizable percentage of the Army fought alongside the Hungarian revolutionaries. Three years later in 1959, the Soviets began helping rebuild the Hungarian People's Army and resupplying them with new arms and equipment as well as rebuilding the Hungarian Air Force. Satisfied that Hungary was stable and firmly committed once again to the Warsaw Pact, the Soviets offered the Hungarians a choice of withdrawal for all Soviet troops in the country. The new Hungarian leader, János Kádár, asked for all the 200,000 Soviet troops to stay, because it allowed the socialist Hungarian People's Republic to neglect its own draft-based armed forces, quickly leading to deterioration of the military. Large sums of money were saved that way and spent on feel-good socialist measures for the population, thus Hungary could become "the happiest barrack" in the Soviet Bloc. Limited modernization though, would happen from the mid-1970s onward to replace older stocks of military equipment with newer ones. Thus enabling the HPA, in a small way, to honor its Warsaw Pact commitments coupled with a mid-1980s organization which abolished divisions and replaced them with ground force brigades and a singular air force command.

The HPA was divided into the Ground and Air Forces. Until 1985, the Ground Forces were organized into:

 * 5th Hungarian Army at Székesfehérvár
 * 7th Motor Rifle Division at Kiskunfélegyháza
 * 8th Motor Rifle Division at Zalaegerszeg
 * 9th Motor Rifle Division at Kaposvár
 * 11th Tank Division at Tata
 * 3rd Army Corps at Cegléd
 * 4th Motor Rifle Division at Gyöngyös
 * 15th Motor Rifle Division at Nyíregyháza

Air Forces Headquarters at Veszprém
 * 11th Air-defense Artillery Brigade at Budapest, after 1977 Érd
 * 1st Air Defense Division at Veszprém
 * 47th Fighter Regiment at Pápa
 * 31st Fighter Regiment at Taszár
 * 104th Air-defense Artillery Regiment Nagytarcsa after Szabadszállás
 * 2nd Air Defense Division at Miskolc
 * 59th Fighter Regiment at Szolnok
 * 105th Air-defense Artillery Regiment at Miskolc

Training for conscripts was poor and most of those drafted were actually used as a free labour force (esp. railway track construction and agricultural work) after just a few weeks of basic rifle training. Popular opinion grew very negative towards the Hungarian People's Army and most young men tried to avoid the draft with bogus medical excuses.

The 1990s and Twenty-first century
In 1997, Hungary spent about 123 billion HUF (US$560 million) on defence. Hungary became a member of NATO on 12 March 1999. Hungary provided airbases and support for NATO's air campaign against Serbia and has provided military units to serve in Kosovo as part of the NATO-led KFOR operation. Hungary has sent a 300 strong logistics unit to Iraq in order to help the US occupation with armed transport convoys, though public opinion opposed the country's participation in the war. One soldier was killed in action due to a roadside bomb in Iraq. The parliament refused to extend the one year mandate of the logistics unit and all troops have returned from Iraq as of mid-January 2005. Hungarian troops were still in Afghanistan as of early 2005 as part of the International Security Assistance Force. There were reports that Hungary would most probably replace its old UAZ 4x4 vehicles with the modern Iveco LMV types, but it never happened. Hungarian forces deploy the Gepárd anti-materiel rifle, which is a heavy 12.7 mm portable gun. This equipment is also in use by the Turkish and Croatian armed forces, among other armies.

In a significant move for modernization, Hungary decided in 2001 to lease 14 JAS 39 Gripen fighter aircraft (the contract includes 2 dual-seater airplanes and 12 single-seaters as well as ground maintenance facilities, a simulator, and training for pilots and ground crews) for 210 billion HUF (about 800 million EUR). Five Gripens (3 single-seaters and 2 two-seaters) arrived in Kecskemét on 21 March 2006, expected to be transferred to the Hungarian Air Force on March 30. 10 or 14 more aircraft of this type might follow up in the coming years.

In early 2015, Hungary and Sweden extended the lease-program for another 10 years with a total of 32,000 flight-hours (95% increase) for only a 45% increase in cost.

Zrínyi 2026 Modernization Program
In 2016, PM Orbán confirmed that Hungary will meet its NATO obligations by increasing its defense spending to about 2 percent of GDP. The official government "Zrínyi 2026" program of upgrading military equipment is scheduled to last until 2026, but the timeline has been expanded until 2030–2032. New purchased and ordered equipment so far includes new CZ BREN 2 assault rifles (to be manufactured locally), helicopters, transport and trainer aircraft, tanks, armored vehicles, radars and surface-to-air missiles.

Hungary ordered 20 H145M and 16 H225M in 2018. All H145M aircraft had been delivered by the end of 2021. H225M are expected to arrive between 2023 and 2024.

In early 2019 the first batch of Carl Gustaf M4s has arrived, starting to replace the old RPG-7s.

In late 2019, Hungary signed a contract for 44 Leopard 2 A7+ tanks and 24 PzH 2000 howitzers for €300 million to be delivered in 2021 to 2025. In 2020 Hungary and Rheinmetall Group have signed a contract to start manufacturing the Lynx infantry fighting vehicle family in Hungary. Estimated to start arriving around 2024–2025, the first batch of 200+ Lynx vehicles are expected to reach operational capability in the Hungarian Defence Forces by 2026-2027

In 2020 the Hungarian airforce ordered two KC-390 cargo and tanker aircraft to be delivered in 2023 and 2024. This year Kongsberg and Raytheon were awarded a 410 million EUR contract by Hungary for NASAMS surface-to air missile systems. 11 ELM-2084 radars were also ordered in late 2020. The Mistral SAM system has been upgraded: new M3 missiles were purchased and both the launchers and the MCPs were modernized.

In 2021 Spike LR2 anti-tank missiles has been ordered, mainly for the Lynx IFVs. In August 2021 contract has been signed with SAAB to upgrade the Hungarian Gripen fleet to the MS20 Block 2 standard. This upgrade greatly increases both Gripen's combat and communication capabilities, as well as access to a wide range of weapons that can be integrated on Hungarian Air Force Gripen fighters. The cutting edge IRIS-T missile has been also ordered in 2021. Meteor and GBU-49 is planned to be purchased for the Gripen's arsenal. There is a plan to also set up a second fighter squadron, but it has not been confirmed.

Current international missions
The Hungarian Defence Forces currently takes part in the following international missions:
 * EUFOR Operation Althea
 * HDF EUFOR Althea Contingent, Bosnia and Herzegovina
 * EUTM Mali
 * HDF Training Contingent, Mali
 * Kosovo Force
 * HDF KFOR Contingent, Kosovo
 * United Nations Peacekeeping Force in Cyprus
 * HDF UNFICYP Contingent, Cyprus

Other missions include: United Nations Interim Force in Lebanon, EUNAVFOR MED, MINURSO and EUMM

title: Hungarian Defence Forces


text:
Foreign relations of Hungary

Hungary wields considerable influence in Central and Eastern Europe and is a middle power in international affairs. The foreign policy of Hungary includes commitments to international development, international law, European integration, Atlantic co-operation and increased co-operation within the Global East. The Hungarian economy is fairly open and relies strongly on international trade.

Hungary has been a member of the United Nations since December 1955 and holds current membership with the European Union, NATO, the OECD, the Visegrád Group, the WTO, the World Bank, the AIIB and the IMF. Hungary took on the presidency of the Council of the European Union for half a year in 2011 and the next will be in 2024. In 2015, Hungary was the fifth largest OECD Non-DAC donor of development aid in the world, which represents 0.13% of its Gross National Income. In this regard, Hungary stands before Spain, Israel or Russia.

Hungary's capital city, Budapest is home to more than 100 embassies and foreign representative bodies. Hungary hosts the main and regional headquarters of many international organizations as well, including European Institute of Innovation and Technology, European Police College, United Nations High Commissioner for Refugees, Food and Agriculture Organization of the United Nations, International Centre for Democratic Transition, Institute of International Education, International Labour Organization, International Organization for Migration, International Red Cross, Regional Environmental Center for Central and Eastern Europe, Danube Commission and even others.

From 1989, Hungary's top foreign policy goal was achieving integration into Western economic and security organizations. It joined the Partnership for Peace program in 1994 and has actively supported the IFOR and SFOR missions in Bosnia. It also improved its often frosty neighborly relations by signing basic treaties with Ukraine, Slovakia, and Romania. These renounce all outstanding territorial claims and lay the foundation for constructive relations. However, the issue of ethnic Hungarian minority rights in Romania, Slovakia and Ukraine periodically causes bilateral tensions to flare up. Hungary since 1989 has signed all of the OSCE documents, and served as the OSCE's Chairman-in-Office in 1997. Hungary's record of implementing CSCE Helsinki Final Act provisions, including those on the reunification of divided families, remains among the best in Central and Eastern Europe.

Except for the short-lived neutrality declared by the anti-Soviet leader Imre Nagy in November 1956, Hungary's foreign policy generally followed the Soviet lead from 1947 to 1989. During the Communist period, Hungary maintained treaties of friendship, cooperation, and mutual assistance with the Soviet Union, Poland, Czechoslovakia, the German Democratic Republic, Romania, and Bulgaria. It was one of the founding members of the Soviet-led Warsaw Pact and Comecon, and it was the first country to withdraw from those organizations. After 1989, it began to orient more towards the West, joining NATO in 1999 and the European Union in 2004. In 2010, Hungary initiated its Eastern Opening Policy, marking a commitment to enhancing its relations with other nations within the Global East.

Overview
As with any country, Hungarian security attitudes are shaped largely by history and geography. For Hungary, this is a history of more than 400 years of domination by great powers—the Ottomans, the Habsburg dynasty, the Germans during World War II, and the Soviets during the Cold War—and a geography of regional instability and separation from Hungarian minorities living in neighboring countries. Hungary's foreign policy priorities, largely consistent since 1990, represent a direct response to these factors. From 1990, Hungary's top foreign policy goal was achieving integration into Western economic and security organizations. Hungary joined the Partnership for Peace program in 1994 and has actively supported the IFOR and SFOR missions in Bosnia. The Horn government achieved Hungary's most important foreign policy successes of the post-communist era by securing invitations to join both NATO and the European Union in 1997. Hungary became a member of NATO in 1999, and a member of the EU in 2004.

Hungary also has improved its often frosty neighborly relations by signing basic treaties with Romania, Slovakia, and Ukraine. These renounce all outstanding territorial claims and lay the foundation for constructive relations. However, the issue of ethnic Hungarian minority rights in Slovakia and Romania periodically causes bilateral tensions to flare up. Hungary was a signatory to the Helsinki Final Act in 1975, has signed all of the CSCE/OSCE follow-on documents since 1989, and served as the OSCE's Chairman-in-Office in 1997. Hungary's record of implementing CSCE Helsinki Final Act provisions, including those on the reunification of divided families, remains among the best in eastern Europe. Hungary has been a member of the United Nations since December 1955.

This involves Hungary and Czechoslovakia, and was agreed on September 16, 1977 ("Budapest Treaty"). The treaty envisioned a cross-border barrage system between the towns Gabčíkovo, Czechoslovakia and Nagymaros, Hungary. After an intensive campaign, the project became widely hated as a symbol of the old communist regime. In 1989 the Hungarian government decided to suspend it. In its sentence from September 1997, the International Court of Justice stated that both sides breached their obligation and that the 1977 Budapest Treaty is still valid. In 1998 the Slovak government turned to the International Court, demanding the Nagymaros part to be built. The international dispute was partially solved in 2017.
 * The Gabčíkovo - Nagymaros Dams project

On March 19, 2008, Hungary recognized Kosovo as an independent country.

Relations between Hungary and its Western partners have strained, because Orban's government has maintained relations with Russia despite sanctions against Russia after the 2022 Russian invasion of Ukraine.

Illicit drugs: Major trans-shipment point for Southwest Asian heroin and cannabis and transit point for South American cocaine destined for Western Europe; limited producer of precursor chemicals, particularly for amphetamines and methamphetamines

Refugee protection: The Hungarian border barrier was built in 2015, and Hungary was criticized by other European countries for using tear gas and water cannons on refugees of the Syrian Civil War as they were trying to pass the country.

Since 2017, Hungary–Ukraine relations have rapidly deteriorated over the issue of the Hungarian minority in Ukraine.

Hungary and Central Asia
A number of Hungarian anthropologists and linguists have long had an interest in the Turkic peoples, fueled by the eastern origin of the Hungarians' ancestors. The Hungarian ethnomusicologist Bence Szabolcsi explained this motivation as follows: "Hungarians are the outermost branch leaning this way from age-old tree of the great Asian musical culture rooted in the souls of a variety of peoples living from China through Central Asia to the Black Sea".

Since the political transformation in 1990, Hungary has prioritized its diplomatic engagements with the Turkic world. in 2018, Hungary became an observer within the Organisation of Turkic States, underscoring a deepened engagement in regional cooperation.

Diplomatic relations
List of countries which Hungary maintains diplomatic relations with (all UN member states except 🇧🇹 Bhutan and 🇻🇺 Vanuatu):

Foreign criticism
In December 2010, the Fidesz government adopted a press and media law which threatens fines on media that engage in "unbalanced coverage". The law aroused criticism in the European Union as possibly "a direct threat to democracy".

In 2013, the government adopted a new constitution that modified several aspects of the institutional and legal framework in Hungary. These changes have been criticized by the Council of Europe, the European Union and Human Rights Watch as possibly undermining the rule of law and human rights protection.

title: Foreign relations of Hungary