Following the end of the Second World War, Hungary fell under the control of the Soviet Union until eventually regaining its independence and holding multiparty elections in 1990. Since then, the country’s economy has rapidly transformed from a centrally planned to a modern market economy, with a private sector that now accounts for over 80 per cent of GDP. Hungary has also developed increasingly strong ties to the West, joining NATO in 1999 and becoming a full member of the EU in 2004.

The restructuring of the economy following independence was not without its difficulties, demonstrated by the fact that, in the first few years after 1990, GDP fell by nearly 25 per cent while inflation and unemployment both increased. However, this trend has now been reversed, spurred on by strong foreign investment and a growing small-business sector. According to the Hungarian Central Statistical Office, the country’s economy grew by 3 percent in 2003 and by 4 per cent during 2004. One of the main challenges facing Hungary in the coming years is to cut its public sector deficit to 3 per cent of GDP, which is essential in order for the country to realise its ambition of joining the eurozone in 2010. Hungary’s most important trading partners include Germany, Austria, Italy, the Czech Republic, the Russian Federation, the United States, Japan and Brazil.

The country has a well developed transport infrastructure, with extensive road and railway networks that serve most of the country and connect it with the rest of Europe. In addition, Budapest Ferihegy International Airport, situated just outside the capital, offers direct flights to and from over 30 European countries, as well as to destinations around the Mediterranean including Cairo, Larnaca and Tel Aviv. There are also regular flights in operation between Budapest and the USA.