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1994-05-02
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<text>
<title>
Hungary: World Trade Outlook
</title>
<article>
<hdr>
World Trade Outlook 1992: Hungary
U.S. Exports Take Off As Economy Engages With West
</hdr>
<body>
<p>By Brian Toohey
</p>
<p>Despite a Hungarian economic recession that possibly will
persist into 1993, U.S. exports to Hungary should top the 1991
level of $256 million. As the Hungarian economy increasingly
engages with the West, American investors will respond and push
the volume of investment past the present level of near $1.5
billion.
</p>
<p>U.S. exports 1991--$256 million U.S. imports 1991--$367
million
</p>
<p> Hungary remains in recession as it attempts to restructure
its economy. Industrial production shrank almost 10 percent in
1991 and should shrink another 8 percent in 1992. Unemployment
reached an unprecedented 6 percent in 1992, and inflation
topped 30 percent.
</p>
<p> The economy should rebound by 1993 when the now-burgeoning
private sector becomes a dominant force. Meanwhile, the
Hungarian government projects that in 1992 privatization will
gather steam and inflation will subside, and the forint will be
made fully convertible by 1994.
</p>
<p> U.S. exports to Hungary shot up 64 percent in 1991, mostly
due to deliveries of U.S. commercial aircraft to the state
airline Malev. Apart from aircraft, U.S. exports rose 6
percent. Analytical instruments and telecommunications equipment
both performed well, nearly doubling 1990 export levels.
</p>
<p> With high Hungarian demand for U.S. products, the export
picture for the coming year looks bright. The best prospects
include equipment for food processing and packaging,
telecommunications, health care, computers and peripherals, as
well as consumer goods. Already this year, two American
companies won separate contracts for computer equipment totaling
nearly $1 million. On the investment side, major recent deals
have boosted total U.S. investment to near $1.5 billion, leaving
the United States the leading foreign investor.
</p>
<p> U.S. government and multilateral assistance programs will
remain key in supporting U.S.-Hungarian business in 1992. The
U.S. Export-Import Bank offers loans, loan guarantees, and
export credit insurance, and the Overseas Private Investment
Corporation (OPIC) offers financing and political risk
insurance. The Hungarian-American Enterprise Fund, which
provides financing to help develop the Hungarian private sector,
currently has disbursed more than $25 million in direct
investments and loans. The World Bank is currently funding
development projects for the health care, energy,
transportation, and financial sectors. The European Bank for
Reconstruction and Development (EBRD) is now fully established,
and supports infrastructure development projects as well as
private joint ventures in Hungary.
</p>
<p> The Commerce Department is sponsoring a number of trade
promotion events to be held in Hungary during the coming year.
Pavilions have been established for U.S. firms at the IFABO
Computer Fair (April 27-30) and the Budapest Spring Fair (May
20-27).
</p>
<p> For further information on Commerce trade promotion events
or trade and investment opportunities in Hungary, contact the
Eastern Europe Business Information Center at (202) 482-2645.
</p>
<p>Source: International Trade Administration, Business America Magazine
</p>
</body>
</article>
</text>