Hungary in the 21st Century

By | December 27, 2021


Central European state. The Hungary, Which at the 2001 census had registered 10,197,119 residents, With a density of 109 residents per km 2, it is experiencing a marked decline in the population, whose signs have begun to emerge since the early eighties of the 20th century. and that in the period from 2000-2005 was equal to 0.2 %. The birth rate (9.7 ‰ in 2006) is in line with the European average, while the mortality rate is higher (13.1 ‰); the migratory balance is not very significant (0.86‰). This average trend presents differentiated aspects within the Hungarian territory: processes of demographic contraction are underway in the smaller rural centers and in the weaker urban realities. Even Budapest, a city in which one fifth of the total population is concentrated (about 1,700,000 residents In 2005), highlights processes of stopping urbanization and deurbanization with redistribution of residents outside the central area, similar to what happens in large European cities. From the ethnic point of view, the Hungary it offers prevalent characteristics of homogeneity, and the Magyars represent 92.3 % (2001 census) of the population.

The economic progress achieved by the Hungary during the nineties of the last century and in the first six years of the 21st century. they were remarkable and allowed the country to reach the parameters required to become part of the European Union (1 May 2004). In the period 1995-2004, the increase in GDP remained around 4 % per year, with a peak of 5 % recorded in 2000 thanks to the increase in exports; also in 2005-06 the growth was higher than 4%, fueled above all by the inflow of foreign capital, mainly of Austrian and German origin, and by consumption, which grew to a greater extent than exports and investments. Although entry into the European Union has given a significant boost to the Hungarian economy, negative repercussions have been manifesting themselves in agriculture and in the regional production structure. In 1990 over 95 % of agricultural land was worked by 18 % of the active in cooperatives and state farms: in 2005 the agricultural sector constituted 2.8 % of GDP with 5.4 % of the total workforce. The privatization of the land created about 2millions of companies, of which 766,000 small-sized (4.5 ha on average), where over 60 % of small owners work on plots of less than one hectare and whose minimum level of self-sufficiency has led them to gradually withdraw from the market. Conversely, large companies (around 7800), completely privatized, must face competition at the community level, relying solely on a progressive increase in crop yields. The zootechnical patrimony is decreasing, with a prevalence of pigs, sheep and birds. Furthermore, the aging of the rural population causes increasing difficulties in the management of funds; this situation has had more serious repercussions in the eastern regions, which have always been the most agricultural in the country, even if the entry of Bulgaria and Romania into the European Union (2007) made them less peripheral. In this context, the implementation of programs for the development of the road and rail network, which envisage the construction of new motorways (600 km between2005 and 2010) and highways to the Ukrainian, Romanian and Serbian borders, as well as the construction of bridges over the Danube and ports over the Tisza.

Inflation, which in the early 21st century. it had remained high with values ​​between 7 and 10 %, higher than those of other European countries, it fell in 2005 to 3.5 %, with an unemployment rate stabilized at around 6 – 7 %. The increase in exports (in particular of capital goods) has considerably reduced the trade balance deficit; public debt remains high (over 6 % in 2005) despite the commitments made by the government after the European Commission initiated the infringement procedure.


In the early 21st century. the political life of the Hungary – which had undertaken without traumatic shocks, in the last decade of the 20th century, the arduous process of modernization and internal democratization – was still predominantly dominated by economic issues, which became particularly relevant in view of the country’s entry into the Union European (EU), in 2004.

The center-right and center-left governments, which in the 1990s had alternated in power, had directed their efforts to create a market economy and had promoted free-market and spending reduction policies, in an attempt to heal the deficit and rebalance the state accounts. However, the growth in foreign investment that such a policy had entailed had not translated into widespread well-being, since social inequalities had grown, the unemployment rate had remained high and the living conditions of the population had suffered a drastic deterioration. following the reduction of social services offered by the public administration. Regional imbalances were also accentuated, to the detriment of the north-eastern areas. For Hungary history, please check

A brake on austerity policies and therefore greater attention to social problems seemed to arise with the coming to power of the center-right coalition formed by the Democratic Forum (MDF, Magyar Demokrata Fórum) and the Federation of Young Democrats (FIDESz, Fiatal Demokraták Szövetsége), winner of the 1998 elections. The new government, chaired by V. Orban, in fact launched a program with a strongly populist tone (ie tax reduction, a brake on privatization, skepticism towards international economic institutions), envisaging a slower adaptation to European parameters. In reality, the economic policy of the executive did not deviate in its fundamental lines from that of previous governments, even if the worsening of public accounts that occurred in that period threatened to actually slow down the process of integration with the other European states. Having lost the consensus on the part of public opinion, strongly disappointed by the failure to implement the electoral program, the governing coalition was defeated by the legislative elections in April 2002won by the center-left (Socialist Party, MSzP, Magyar Szocialista Párt, and Alliance of Free Democrats, SzDSz, Szabad Demokraták Szövetsége), which won 198 seats. The new government, led by the socialist leader P. Medgyessy, relaunched economic reforms: it accelerated the privatization process and launched new austerity measures aimed at remedying the public deficit. At the same time, measures were adopted in favor of the white-collar middle class which also included an increase in the salaries of civil servants, aid to families, greater allocations for health and education. With a view to approaching EU membership (which took place in May 2004), the restrictive financial measures were accentuated and this provoked conflicts within the same majority, culminating in the resignation of Medgyessy (ag. 2004), who was succeeded by F. Gyurcsány. Socialist, entrepreneur, who became a billionaire following privatizations, the new head of government kept the executive’s priorities in economic policy unchanged but managed to use his charisma to keep the coalition united and to gain the consent of the population. Presented to the voters, in view of the legislative consultations of April 2006, presenting a program that aimed at the strengthening of social services, but above all at the reabsorption of unemployment through the relaunch of production and infrastructural investments, to be carried out thanks to the funding guaranteed by the EU, Gyurcsány was able to counter the Euroscepticism and national-populism of which he the right-wing, which has become very critical of privatizations, and to guarantee its coalition a majority of seats in Parliament (210 deputies against 164of the right-wing opposition). In September, however, the prime minister’s popularity plummeted following the release of an audio recording, collected at a private meeting of his party, in which he admitted to having lied during the election campaign about the real economic program of the government.

In terms of foreign policy, the country has aimed over the years to intensify relations with Western nations, and to increase its regional role.

Hungary in the 21st Century