Hungary in Troubled Economic Times

Bloomberg indicates troubled times in Hungary due to

• the global economic recession and the lack of reform from communism over the past two decades.
• Hungary’s main trading partner is the European Union which is in recession.
• Veritas has cut shops
• Audi has closed its plant
• Rising unemployment, with predicitions of a rise to 8-10% unemployment
• Violent protests due to an unpopular president
• Bloomberg has indicated that analysts put the economic decline at about 2% next year.
• the IMF helped thwart a major default by the country by bailing the country out
• inflexible labor market and tax structure
• Opportunities may arise for Hungary to attract businesses seeking to lower costs.

Action taken

• $6.5 billion stimulus targeting small and medium businesses

Opportunities

• attracting foreign businesses and investment by improving its tax structure, labor market and incentives