Editing Economy of Hungary (section)

== History of the Hungarian economy ==
[[File:GPD per capita development of Hungary.jpg|thumb|305px|right|Real GDP per capita development of Hungary]]

=== 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{{clarify|date=December 2016}}: the royal, ecclesiastical and secular private estate. The royal estate of the [[Árpád dynasty]] had evolved from the tribal lands.{{clarify|date=December 2016}}

The origin of the secular private holdings dates back to the conquest tribal common estates{{clarify|date=December 2016}}, 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 [[Income register of Béla III of Hungary|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.

=== Anjou Age ===

=== Modern Age ===

[[File:Berthold Weiss Canned Foods.jpg|thumb|left|250px|The Berthold and [[Manfred Weiss Canned Food Factory]] (1880)]]
[[File:BKIK épülete.jpg|thumb|left|250px|Chamber of Commerce and Industry of Budapest, beginning of the 20th century]] 		 	
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.<ref>[[G.N. Georgano]] ''Cars: Early and Vintage, 1886–1930''. (London: Grange-Universal, 1985)</ref> 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 [[MÁV Class 601|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 in Hungary|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.	

In this era great social progress was made, for example the population between 20 and 24 years old with less than 8 years of education decreased from 71.2% in 1949 to 4.9% in 1984, the annual consumption of meat and fish increased from 35 kilograms in 1950 to 78 in 1984, the percentage of homes with electricity increased from 46.6% in 1949 to 99% in 1984, in the same period the percentage of homes with running water increased from 17.1% to 76.6%, the number of cars per 1,000 people increased from 3 in 1960 to 122 in 1984, in the case of televisions from 10 to 276, in the case of washing machines from 45 to 317, in the case of refrigerators from 4 to 328, infant mortality (per 1,000 live births) fell from 91 in 1949 to 20.4 in 1984.<ref name="auto3">{{Cite journal |last1=Andorka |first1=Rudolf |last2=Harcsa |first2=István |date=1990 |title=Modernization in Hungary in the Long and Short Run Measured by Social Indicators |url=http://www.jstor.org/stable/27520838 |journal=Social Indicators Research |volume=23 |issue=1/2 |pages=1–199 |doi=10.1007/BF00353421 |jstor=27520838 |issn=0303-8300}}</ref>	

Per capita national income grew by 343% from 1950 to 1983 (4.6% per year), real wages by 136% and real incomes by 251% over the same period,meanwhile real value of per capita social benefits rose by 432% from 1960 to 1980.        From 1949 to 1984, Hungary's GDP grew as fast as that of countries like Spain.<ref name="auto3"/><ref>{{Cite journal |last=Bródy |first=A. |date=1995 |title=The Hungarian Gdp, as Measured by Proxies (appraisal of the Short-Cut Method of F. Jánossy) |url=https://www.jstor.org/stable/40729605 |journal=Acta Oeconomica |volume=47 |issue=1/2 |pages=69–94 |jstor=40729605 |issn=0001-6373}}</ref><ref>Escosura,L.P. (2003) : https://www.fbbva.es/wp-content/uploads/2003/09/DE_2003_LPrados_El_progreso_economico.pdf</ref>	

Also poverty was greatly reduced,although from 1962 to 1982 the price index rose by 96%, people with less than 800 forints were 55% in 1962 and after 20 years only 6.4% of those with less than 1800 forints,In 1987, inequality was minimal, with a Gini coefficient of 0.21, and poverty was the same, with a 1% poverty rate (poverty line: $120 PPP per person per month).<ref name="auto3"/><ref>Milanović, Branko (1998). ''Income, Inequality and Poverty during the Transition from Planned to Market Economy.'' Washington, D. C.: Banco Mundial http://documents1.worldbank.org/curated/en/229251468767984676/pdf/multi-page.pdf</ref>	

Although Hungary enjoyed one of the most liberal and economically advanced economies of the former [[Eastern Bloc]] even though at the end of the 80s state employment represented 94% of the total,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&nbsp;billion in 1973 to $15&nbsp;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)===
[[File:ING-Bank-szekhaz-P2030395-lev-1000.jpg|thumb|left|ING headquarters in Budapest]]	 
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.<ref>{{cite web |title=Warum die UdSSR nicht in die DDR einmarschierte |date=3 October 2015 |url=https://www.welt.de/politik/deutschland/article4764352/Warum-die-UdSSR-nicht-in-die-DDR-einmarschierte.html |access-date=18 February 2020}}</ref> 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."<ref name=es>{{cite book |url=http://www.koed.hu/medit/endre.pdf |chapter=The Political and Economic Transition in Hungary |title=Medi(t)ations, (re)conciliations: Conflict Resolution and European Integration |pages=85–90 |place=Bratislava |last=Spaller |first=Endre}}</ref> 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 direct investment|foreign investment]],<ref name="megginson01">{{cite journal |doi=10.1257/jel.39.2.321 |title=From State to Market: A Survey of Empirical Studies on Privatization |year=2001 |last1=Megginson |first1=William L. |last2=Netter |first2=Jeffry M. |journal=Journal of Economic Literature |volume=39 |issue=2 |pages=321–389 |hdl=10419/154955 |hdl-access=free}}</ref><ref name="mihalyi01">{{cite journal |doi=10.1556/AOecon.51.2000-2001.1.5 |title=Foreign Direct Investment in Hungary – the Post-Communist Privatisation Story Re-Considered |year=2001 |last1=Mihályi |first1=P. |journal=Acta Oeconomica |volume=51 |pages=107–129 |s2cid=154331929 |url=http://real.mtak.hu/47184/1/aoecon.51.2000-2001.1.5.pdf}}</ref> with a "cumulative foreign direct investment totaling more than $60&nbsp;billion since 1989."<ref>{{cite web|url=https://www.cia.gov/the-world-factbook/countries/hungary/|title=CIA – The World Factbook – Hungary|date=28 March 2023}}</ref>	

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.{{citation needed|date=February 2023}}	 
[[File:Megyeri híd.jpg|220px|thumb|upright|[[Megyeri Bridge]]]]	

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,<ref name=":0" /> and foreign owners control 70% of financial institutions, 66% of industry, 90% of telecommunications, and 50% of the trading sector.{{citation needed|date=February 2023}}		 
[[File:Kőröshegy légifotó.jpg|thumb|left|Kőröshegy Viaduct]]	

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 pension system|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.<ref name=":1">{{cite book |last=Stalker |first=Peter |title=A guide to countries of the world |date=2010 |publisher=Oxford university press |isbn=978-0-19-958072-9 |series=Oxford paperback reference}}</ref> 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&nbsp;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 of the United States|Export-Import Bank]].{{citation needed|date=February 2023}}	

With about $18&nbsp;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&nbsp;billion came from American companies. Foreign capital is attracted by skilled and relatively inexpensive labor, tax incentives, modern infrastructure, and a good telecommunications system.{{citation needed|date=February 2023}}		

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."<ref>{{Cite news|url=https://www.usatoday.com/money/world/2006-06-22-hungary-usat_x.htm|title=Hungary faces enormous economic hurdles|work=[[USA Today]]|access-date=5 December 2008|first=David J.|last=Lynch|date=23 June 2006}}</ref>

===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.<ref name="3541privatization_in_hun">{{cite book |url=https://books.google.com/books?id=vlADbGaMluEC&pg=PA427 |title=Privatization in Hungary and its Aftermath |author=Iván Major |year=2003 |publisher=Edward Elgar Publishing |access-date=5 January 2010 |isbn=978-1-84064-613-9}}</ref> 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".<ref name="3541privatization_in_hun"/>

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.<ref name="3458strucutural_problems">{{cite journal |url=http://jcea.agr.hr/volumes.php?lang=en&search=Article%3A136&field=title |title=Structural Problems in Hungarian Agriculture After the Political Turnover |author1=B. Vizvári |author2=Zs. Bacsi |date=2 June 2003 |journal=[[Journal of Central European Agriculture]]|access-date=5 January 2010}}</ref> 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.<ref name="3458strucutural_problems"/>

Small stores and retail businesses were privatized between 1990 and 1994, however, [[greenfield investment]]s by foreign retail companies like [[Tesco]], [[Cora (hypermarket)|Cora]] and [[IKEA]] had a much bigger economic impact.<ref name="3541privatization_in_hun"/> 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.<ref name="4991privatisation_in_hun">{{cite web |url=http://www.nao.org.uk/nao/intosai/wgap/8thmeeting/hungary2chpt4.pdf |title=Privatisation in Hungary (1990–2000) |author=Árpád Kovács |access-date=5 January 2010 |url-status=dead |archive-url=https://web.archive.org/web/20110607035214/http://www.nao.org.uk/nao/intosai/wgap/8thmeeting/hungary2chpt4.pdf |archive-date=7 June 2011}}</ref>

Though most banks were sold to foreign investors, the largest bank, [[OTP 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]].<ref name="5955political_economy_of">{{cite web |url=http://www.sml.hw.ac.uk/cert/wpa/1996/dp9613.pdf |title=Political Economy of Privatization in Hungary: A Progress Report |author1=Anna Canning |author2=Paul Hare |publisher=Department of Economics, Heriot-Watt University |location=Edinburgh |access-date=5 January 2010 |url-status=dead |archive-url=https://web.archive.org/web/20111003090300/http://www.sml.hw.ac.uk/cert/wpa/1996/dp9613.pdf |archive-date=3 October 2011}}</ref>

===Hungary's economy since 1995===
{{update|section|GDP charts only go to 2010|date=July 2022}}
[[File:Gdp inflation activepopulation hungary.png|thumb|right|180px|alt=Chart showing GDP growth, inflation, and active population in Hungary 1990–2010.|GDP growth, inflation, and active population in Hungary 1990–2010]]
[[File:Gdppercapita hungary.png|thumb|right|180px|alt=Chart showing GDP per capita in USD at 2000 market prices in Hungary 1991–2010.|GDP per capita in USD at 2000 market prices in Hungary 1991–2010]]
[[File:EXCEL 2020-09-14 20-16-50.png|alt=General government gross debt in the Czech Republic, Poland, Hungary, Romania, Slovakia, EU27, and the Euro zone.|thumb|180x180px|General government gross debt in Hungary amongst other countries and the EU]]
Reaching 1995, Hungary's fiscal indices deteriorated: foreign investment fell as well as judgement of foreign analysts on economic outlook.<ref name="bokrosinterview">{{cite web|url=http://www.worldbank.org/html/prddr/trans/MayJune95/pgs12-15.htm|title=Hungarian Finance Minister Lajos Bokros Explains His Package|publisher=The World Bank|access-date=12 November 2009}}</ref> Due to high demand in import goods, Hungary also had a high trade deficit<ref name="exttrade">{{cite web|url=http://portal.ksh.hu/pls/ksh/docs/eng/xstadat/xstadat_annual/tabl3_05_02ie.html |title=External trade by groups of countries in HUF (1991–2003) |publisher=KSH |access-date=12 November 2009}} {{dead link|date=June 2016|bot=medic}}{{cbignore|bot=medic}}</ref> and budget gap, and it could not reach an agreement with the [[IMF]], either.<ref name="bokrosinterview"/><ref name="vg_hu">{{cite web|url=http://vg.hu/gazdasag/vg_online/gazdasag_-_belfold/081215_bokros_252890|title=Viták kereszttüzében: a Bokros-csomag (The Bokros Package in the Crossfire)|publisher=Világgazdaság Online|language=hu|date=15 December 2008|access-date=12 November 2009|url-status=dead|archive-url=https://web.archive.org/web/20100316135826/http://www.vg.hu/gazdasag/vg_online/gazdasag_-_belfold/081215_bokros_252890|archive-date=16 March 2010}}</ref>
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|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,<ref name="usgovcikk">{{cite web|url=https://2009-2017.state.gov/r/pa/ei/bgn/26566.htm|title=Background Note: Hungary|publisher=Bureau of Public Affairs: Electronic Information and Publications Office|date=June 2009|access-date=12 November 2009}}</ref> but they were also supported by the IMF and the World Bank,<ref name="konyv">{{cite book|url=https://books.google.com/books?id=n3cBtQz7A4MC&q=protest%20against%20bokros%201995&pg=PA98
|title=Privatizing pensions: the transnational campaign for social security reform|author=Mitchell A. Orenstein|publisher=Princeton University Press|year=2008|access-date=12 November 2009|isbn=978-0-691-13697-4}}</ref> 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"<ref name="median_bokros">{{cite web|url=http://www.median.hu/object.289bbab9-6e1c-4b75-a62d-cb90550284be.ivy|title=Romló közhangulat, stabilizálódó Fidesz-előny (Deteriorating Public Morale, Fidesz's Advantage Stabilizing|publisher=Medián|language=hu|date=14 February 2007|access-date=12 November 2009|archive-date=16 February 2007|archive-url=https://web.archive.org/web/20070216025712/http://www.median.hu/object.289bbab9-6e1c-4b75-a62d-cb90550284be.ivy|url-status=dead}}</ref> and only 4% were convinced that the reforms would "improve the country's finances in a big way"<ref name="bokrosinterview"/>

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.<ref name="konyv"/>

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.<ref name=":2">{{Cite book |last=Inc |first=IBP |url=https://books.google.com/books?id=vU-qCwAAQBAJ&dq=In+2006+Prime+Minister+Ferenc+Gyurcs%C3%A1ny+was+reelected+on+a+platform+promising+economic+%22reform+without+austerity%22.+However%2C+after+the+elections+in+April+2006%2C+the+Socialist+coalition+under+Gyurcs%C3%A1ny+unveiled+a+package+of+austerity+measures+which+were+designed+to+reduce+the+budget+deficit+to+3%25+of+GDP+by+2008.&pg=PA40 |title=Hungary Investment and Business Guide Volume 1 Strategic and Practical Information |date=2015-09-11 |publisher=Lulu.com |isbn=978-1-5145-2857-0 |language=en}}</ref>

Because of the austerity program, the economy of Hungary slowed down in 2007.<ref name=":2" />

===Great Recession===
Declining exports, reduced domestic consumption and fixed asset accumulation affected Hungary during the [[Great Recession]], 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.<ref name="8078hungary_receives_res">{{cite news |url=https://www.theguardian.com/business/2008/oct/29/hungary-economy-imf-eu-world-bank |title=Hungary receives rescue package, with strings attached |author1=Kate Connolly |author2=Ian Traynor |date=29 October 2008 |newspaper=The Guardian|access-date=18 January 2010}}</ref>

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.<ref name="7679economy_and_society_">{{cite web |url=http://portal.ksh.hu/pls/ksh/docs/eng/xftp/gyor/jel/ejel20903.pdf |title=Economy and Society, January–March 2009 |publisher=Hungarian Central Statistical Office |access-date=18 January 2010}}</ref>

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".<ref name="9940global_financial_cri">{{cite news |url=http://www.allbusiness.com/economy-economic-indicators/economic-indicators/11965908-1.html |title=Global Financial Crisis: Hungary |author=Damien Mc Elroy |date=26 February 2009 |newspaper=The Daily Telegraph|location=London |access-date=18 January 2010}}</ref> 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.<ref name="bloomberg-20111230">{{cite news |url=https://www.bloomberg.com/news/2011-12-30/hungarian-lawmakers-approve-central-bank-law-in-snub-imf-european-union.html |title=Hungary's Bailout Chance Wanes as Lawmakers Snub IMF, EU Over Central Bank |author=Zoltan Simon |publisher=Bloomberg |date=30 December 2011 |access-date=30 December 2011}}</ref> The new government also nationalized $13 billion of private pension-fund assets, which could then be used to support the government debt position.<ref name="bloomberg-20111222">{{cite news |url=https://www.bloomberg.com/news/2011-12-22/hungary-top-court-may-rule-on-pension-fund-nationalization-case.html |title=Hungary Top Court May Rule on Pension Fund Nationalization Case |author=Zoltan Simon |publisher=Bloomberg |date=22 December 2011 |access-date=30 December 2011}}</ref>

=== 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.<ref>{{cite web |url=http://www.bbj.hu/economy/hungary-gdp-grows-14percent-yr-yr-in-q4-up-17percent-in-2011_62619 |title=Hungary GDP grows 1.4% yr/yr in Q4, up 1.7% in 2011 |publisher=BBJ |access-date=15 February 2012 |archive-date=29 March 2012 |archive-url=https://web.archive.org/web/20120329062656/http://www.bbj.hu/economy/hungary-gdp-grows-14percent-yr-yr-in-q4-up-17percent-in-2011_62619 |url-status=dead}}</ref>

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".<ref name="bbc-20111222">{{cite news |url=https://www.bbc.co.uk/news/business-16298773 |title=Hungary borrowing costs rise on junk downgrade |publisher=BBC |date=22 December 2011 |access-date=27 December 2011}}</ref><ref name="guardian-20111225">{{cite news |url=https://www.theguardian.com/commentisfree/2011/dec/25/hungary-playing-chicken-editorial |title=Hungary: playing chicken |newspaper=The Guardian|date=25 December 2011 |access-date=27 December 2011}}</ref><ref name="bbc-20120106">{{cite news|url=https://www.bbc.co.uk/news/business-16446307|title=Third ratings agency gives Hungary a junk credit rating|publisher=BBC|date=6 January 2012|access-date=9 January 2012}}</ref> In part this is because of political changes creating doubts about the independence of the [[Hungarian National Bank]].<ref>[https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2944875 Terminal Risks for Independent Fiscal Institutions: Lessons from IFIs in Hungary and Venezuela]. Social Science Research Network (SSRN). Accessed 18 July 2017.</ref><ref name="bbc-20111222" /><ref name="guardian-20111225" />

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."<ref name="bloomberg-20111230" />
	
The [[European Commission]] launched legal proceedings against Hungary on 17 January 2012. The procedures concern Hungary's [[Hungarian National Bank|central bank law]], the retirement age for judges and prosecutors and the independence of the data protection office, respectively.<ref>[http://www.politics.hu/20120117/barroso-says-unwillingness-of-hungary-to-make-changes-pushes-ec-to-act-against-budapest/ Barroso says unwillingness of Hungary to make changes pushes EC to act against Budapest] {{Webarchive|url=https://web.archive.org/web/20120118130832/http://www.politics.hu/20120117/barroso-says-unwillingness-of-hungary-to-make-changes-pushes-ec-to-act-against-budapest/ |date=18 January 2012}}, ''Politics.hu'', 17 January 2012; accessed 21 January 2012</ref><ref>[https://www.bbc.co.uk/news/world-europe-16593827 EU opens legal action against Hungary over new laws], [[BBC News]], 17 January 2012; accessed 21 January 2012</ref> One day later Orbán indicated in a letter his willingness to find solutions to the problems raised in the infringement proceedings.<ref>[http://www.politics.hu/20120118/orban-says-hungary-ready-to-cooperate-to-resolve-eu-infringement-issues/ Orbán says Hungary ready to cooperate to resolve EU infringement issues] {{Webarchive|url=https://web.archive.org/web/20131126172135/http://www.politics.hu/20120118/orban-says-hungary-ready-to-cooperate-to-resolve-eu-infringement-issues/ |date=26 November 2013}}, ''Politics.hu'', 18 January 2012; accessed 21 January 2012</ref> 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.<ref>[http://www.politics.hu/20120118/hungary-reorganised-under-european-principles-says-pm/ Orbán tells European Parliament disputes a natural result of Hungarian government's "magnificent" efforts] {{Webarchive|url=https://web.archive.org/web/20131126170513/http://www.politics.hu/20120118/hungary-reorganised-under-european-principles-says-pm/ |date=26 November 2013}}, ''Politics.hu'', 18 January 2012; accessed 21 January 2012</ref><ref>[https://www.bbc.co.uk/news/world-europe-16613934 Hungary PM Orbán fights back in European Parliament], [[BBC News]], 18 January 2012; accessed 21 January 2012</ref>

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.<ref>Commission Staff Working Document: Country Report Hungary 2015 including an in-depth review on the prevention and correction of macroeconomic imbalances http://ec.europa.eu/europe2020/pdf/csr2015/cr2015_hungary_en.pdf</ref> 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.{{Citation needed|date=July 2023}} On the other hand, [[inflation]] has risen to the record levels, reaching 24.5% in December 2022, being the highest in Europe.<ref>{{Cite web |title=Drivers of Inflation: Hungary |url=https://www.imf.org/en/Publications/selected-issues-papers/Issues/2023/02/27/Drivers-of-Inflation-Hungary-530224 |access-date=2023-07-13 |website=IMF |language=en}}</ref>