Budapest Stock Exchange
Since 1 June 2004 the Budapest Stock Exchange Ltd. has controlled the BUMIX, an exchange that is made up of listed shares with medium and small capitalisation. The BUMIX index provides an opportunity for the inclusion of shares into the index that don’t meet the standards set out by the BUX index. Five of the companies listed with the stock exchange are Bchem, Graphi, Synergon, Mtelekom and FHB.
Before World War II, the Hungarian economy was focused toward small-scale manufacturing and agriculture. Due to Hungary’s strategic position in Europe and its high lack of natural resources meant that it relied heavily on foreign trade. The early 50’s saw a change to a more self-sufficient economy, which was encouraged by the communist government. Then in 1968 the self-sufficiency attitude was done away with and exchanged for the “New Economic Mechanism,” reopening Hungary to the foreign market.
In 1994 the governments overspending and its hesitancy to privatise became apparent. This led to cuts in consumer subsidies, which meant increases to medicine, food, energy and transportation services. A sharp decline in the GDP occurred due to a lower export rate to the former Soviet bloc and a decreasing industrial output. The end of 1997 saw the consolidated public sector deficit lower to 4.6% of GDP- with the public sector lowering its spending from 62% of GDP to below 50%- the current account deficit was taken down to 2% of GDP, and the government debt was brought down to 94% of annual export earnings.
Before the regime changed in 1989, nearly three quarters of Hungary’s trade was with Comecon countries. By 1997, Hungary was trading predominantly with the West. Now trade with OECD and EU countries now makes up 80% and 70% of the total. Hungary is ranked as 72nd in the export market rankings for the U.S. and considers Germany as its most important trading partner.