HUNGARY’S ECONOMY

G. Scheiring and M. Veres: in Europa Publications (ed.) Central and South-Eastern Europe

Abstract

The results of Hungary’s transformation from a state-run economy into a market-based model are mixed at best. On the positive side, except in times of global recession, the country’s economy was able to expand continuously over the past 30 years, while domestic businesses integrated successfully into the global economy. Hungary was able to establish strong commercial ties with the major economies of the world, and today it is represented in some of the most important economic organizations, such as the EU and the OECD. On the negative side, however, the model along which it carried out its integration into the world economy had severe limitations. Economic growth, above all, has been dependent on foreign capital and financial support. This has shaped the country’s social and economic policy, leading to exploitative labour relations, growing inequality and precarity. The post-2010 illiberal state’s economic strategy was a response to the crisis of Hungary’s post-1990 liberal dependent economic model. In conclusion, the collapse of liberal democracy and the rise of illiberalism in Hungary is tightly interwoven with the vagaries of the country’s economic model.