HUNGARY: REVIVAL OF THE PANNON PUMA
HUNGARY: REVIVAL OF THE PANNON PUMA

Summary/Abstract: Hungary was a front runner in transition until the early 2000s thanks to the fact that the country had one of the highest per capita foreign investment levels in the region, a stable fiscal situation, and a rapid growth rate. This, however, quickly evaporated and the 2008 global financial crisis hit the country severely. This was due to a vulnerability which stemmed from weaker growth potential and a high level of external indebtedness. Hungary’s earlier growth model was based on exports to the European Union, which account for three quarter of total exports, and are based on a wide variety of products, from food to high-tech electronics and car parts. Rapid wage increase in the public sector together with tax increases undermined this model, however, and domestic consumption took over as the main driver of the economy.

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