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Conference paper


István Almási ; Ministry of Agriculture, Budapest, Hungary

Full text: croatian pdf 1.183 Kb

page 239-244

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In the last couple of years Hungarian economic policy has been concerned with reinforcing the transition to a market economy begun in 1989 as well as dealing with some of the consequences of transition. Despite the fact that Hungary was closer to a market economy than other centrally planned economies it still suffered the pains of transition, including: a sharp fall in output, high inflation and severe financial difficulties. Following a difficult period, macroeconomic indicators in 1993 were beginning to show signs of a turnaround. The negative rate of economic growth of- 12 percent in 1991 fell to -4.5 percent in 1992 and a growth rate around zero is expected for 1993. The rate of inflation, which peaked in 1991, declined to 23 percent in 1992 and is expected to remain the same level for 1993. The unemployment rate was around 13 percent in 1993. The agriculture sector and food industry are important for the Hungarian economy. In general, agriculture and food accounts for approximately 20 percent of GDP, 19 percent of total employnment and 25 percent of export. For example, in 1992, the agriculture sector accounted for 17 percent of GDP and employed 13 percent of the active population. The agricultural output increased in nominal terms in 1990 and 1991 but fell in 1992 and 1993 largely due to drought conditions. Input costs have been rising much more sharply that output prices. Because of this fact agriculture and food industries have been making losses in aggregate terms since 1991 . This is reflected in the large number of bankruptcies occuring.The loss of the COMECOM markets was a major factor contributing to these difficulties. The financial situation of the agriculture and food industry is a serious constraint on the process of restructuring. The number of bankruptcies has increased sharply as dept has accumulated and a shortage of credit led to cash flow difficulties. The livestock sector also declined in 1992 and 1993. Due to the rise in feed grain prices resulting from the 1992 and 1993 drought along with the continuing decline in both domestic and export market demand for livestock products over recent years, farmers have been decreasing the size of herds. Compared to 1991 pig numbers declined by 10.5 percent to 5.4 million head and pigs supplied for slaughter declined by 29 percent. Cattle stocks declined 18 percent to a total of 1.2 million head. Both production and consumption of milk declined, and the poultry industry contracted further.


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