Part 385

Government type: republic

National capital: Budapest

Administrative divisions: 19 counties (megyek, singular - megye), 20 urban counties* (singular - megyei varos), and 1 capital city** (fovaros); Bacs-Kiskun, Baranya, Bekes, Bekescsaba*, Borsod-Abauj-Zemplen, Budapest**, Csongrad, Debrecen*, Dunaujvaros*, Eger*, Fejer, Gyor*, Gyor-Moson-Sopron, Hajdu-Bihar, Heves, Hodmezovasarhely*, Jasz-Nagykun-Szolnok, Kaposvar*, Kecskemet*, Komarom-Esztergom, Miskolc*, Nagykanizsa*, Nograd, Nyiregyhaza*, Pecs*, Pest, Somogy, Sopron*, Szabolcs-Szatmar-Bereg, Szeged*, Szekesfehervar*, Szolnok*, Szombathely*, Tatabanya*, Tolna, Vas, Veszprem, Veszprem*, Zala, Zalaegerszeg*

Independence: 1001 (unification by King Stephen I)

National holiday: St. Stephen's Day (National Day), 20 August (commemorates the coronation of King Stephen in 1000 AD)

Constitution: 18 August 1949, effective 20 August 1949, revised 19 April 1972; 18 October 1989 revision ensured legal rights for individuals and constitutional checks on the authority of the prime minister and also established the principle of parliamentary oversight

Legal system: in process of revision, moving toward rule of law based on Western model

Suffrage: 18 years of age; universal

Executive branch: chief of state: President Arpad GONCZ (since 3 August 1990; previously interim president since 2 May 1990) head of government : Prime Minister Gyula HORN (since 15 July 1994) cabinet: Council of Ministers elected by the National Assembly on the recommendation of the president elections: president elected by the National Assembly for a four-year term; election last held 19 June 1995 (next to be held NA 1999); prime minister elected by the National Assembly on the recommendation of the president election results: Arpad GONCZ elected president; a total of 335 votes were cast by the National Assembly, Arpad GONCZ received 259; Gyula HORN elected prime minister; percent of legislative vote NA

Legislative branch: unicameral National Assembly or Orszaggyules (386 seats; members are elected by popular vote under a system of proportional and direct representation to serve four-year terms) elections : last held on 8 and 29 May 1994 (next to be held May 1998) election results: percent of vote by party - NA; seats by party - MSzP 209, SzDSz 70, MDF 37, FKgP 26, KDNP 22, FiDeSz 20, other 2

Judicial branch: Constitutional Court, judges are elected by the National Assembly

Political parties and leaders: Hungarian Democratic Forum or MDF [Sandor LEZSAK, chairman]; Independent Smallholders or FKgP [Jozsef TORGYAN, president]; Hungarian Socialist Party or MSzP [Gyula HORN, president]; Christian Democratic People's Party or KDNP [Gyorgy GICZY, president]; Federation of Young Democrats or FiDeSz [Viktor ORBAN, chairman]; Alliance of Free Democrats or SzDSz [Gabor KUNCZE, chairman]; Hungarian Democratic People's Party or MDNP [Ivan SZABO, chairman] note: the Hungarian Socialist (Communist) Workers' Party or MSzMP renounced Communism and became the Hungarian Socialist Party or MSzP in October 1989; there is still a small MMP (Communist Party); the MDNP was formed in March 1996 by breakaway members of the Hungarian Democratic Forum

International organization participation: Australia Group, BIS, CCC, CE, CEI, CERN, EBRD, ECE, EU (applicant), FAO, G- 9, IAEA, IBRD, ICAO, ICFTU, ICRM, IDA, IFC, IFRCS, ILO, IMF, IMO, Intelsat, Interpol, IOC, IOM, ISO, ITU, MINURSO, MTCR, NACC, NAM (guest), NSG, OAS (observer), OECD, OSCE, PCA, PFP, UN, UNAVEM III, UNCTAD, UNESCO, UNFICYP, UNHCR, UNIDO, UNIKOM, UNMIBH, UNOMIG, UNU, UPU, WEU (associate partner), WFTU, WHO, WIPO, WMO, WToO, WTrO, ZC

Diplomatic representation in the US: chief of mission: Ambassador Gyorgy BANLAKI chancery: 3910 Shoemaker Street NW, Washington, DC 20008 telephone: (202) 362-6730 FAX : (202) 966-8135 consulate(s) general: Los Angeles and New York

Diplomatic representation from the US: chief of mission: Ambassador Donald M. BLINKEN embassy: V. Szabadsag Ter 12, Budapest mailing address: American Embassy Budapest, Department of State, Washington, DC 20521-5270 telephone : (1) 267-4400, 269-9331 FAX: (1) 269-9326

Flag description: three equal horizontal bands of red (top), white, and green

Economy

Economy - overview: Hungary probably had the most Western-oriented economy in East Europe before the transition to a market system began in 1990, and Budapest made good progress in the initial years of transition. The reform process slowed in 1993-94, however, in part because of the May 1994 elections and the resulting change in government. By 1994 the privatization of state firms had ground to a halt, while both the budget and current account deficits soared to unsustainable levels - about 8% and 10% of GDP, respectively. The situation improved sharply in 1995: an austerity program introduced in March reduced both deficits; and a renewed privatization effort later in the year resulted in more than $3 billion worth of sales of state firms to foreign investors - money used mostly to reduce Hungary's large foreign debt. Real GDP increased 2.9% in 1994 - following several years of steep decline - and about 1.5% in 1995 and only 0.5% in 1996. Unemployment reached 14% in early 1993 before gradually falling back to 11% in 1996. Inflation has oscillated; it reached 40% in mid-1991, dropped to 17% in early 1994, jumped back to 31% by mid-1995, and settled at 20% in 1996. Prospects for 1997 and 1998 are good compared with the situation earlier. Most forecasters expect 2% to 3% GDP growth in 1997 and slightly higher growth in 1998. Inflation and unemployment are edging down. With the government still committed to reform, both the budget and current account deficits are at IMF target levels - about 4% of GDP. Budapest also is making good progress in restructuring the pension, health, tax, education, and other systems as part of the effort to decrease the role of government. This dramatic shift in economic policy was rewarded in 1996 by the IMF, which finally signed the standby agreement Budapest had sought, and by the OECD, which welcomed Hungary as a member.

GDP: purchasing power parity - $74.7 billion (1996 est.)

GDP - real growth rate: 0.5% (1996 est.)

GDP - per capita: purchasing power parity - $7,500 (1996 est.)

GDP - composition by sector: agriculture: 7.3% industry : 31.9% services: 60.8% (1994)

Inflation rate - consumer price index: 20% (1996 est.)

Labor force: total: 6.2 million (1996) by occupation: services 58.7%, industry 34.7%, agriculture 6.6 (1996 est.)

Unemployment rate: 11% (1996 est.)

Budget: revenues: $10.2 billion expenditures : $11 billion, including capital expenditures of $NA (1995)

Industries: mining, metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), motor vehicles

Industrial production growth rate: 2% (1996 est.)