OECD reviews of foreign direct investment : Hungary 2000.

Table of contents
Assessment and recommendations
I. Recent trends and prospects
	Overview
		Figure 1. Macroeconomic performance
	Growing exports contribute to an acceleration in GDP
		Table 1. Quarterly gross domestic product
		Figure 2. The climate in the private sector
		Table 2. Quarterly gross domestic product bysector
	Labour market conditions continue to improve
		Figure 3. Employment, unemployment and the labour force
		Table 3. Regional labour market developments
		Table 4. Earnings peremployee
	The disinflation process pauses temporarily
		Figure 4. Consumer price developments
		Figure 5. Components of inflation
		Box 1.  The government’s 2000 anti-inflation programme
	The external balance stabilises
		Figure 6. Trade performance
		Figure 7. Customs versus balance of payments trade data
		Figure 8. Cumulative current account deficit
		Table 5. Current account ofthebalance ofpayments
		Table 6. Merchandise trade balance onacash-flow andaccruals basis
		Box 2. Accounting for trade on an accruals basis in the balance of payments
		Table 7. Financial account ofthebalance ofpayments
		Table 8. Capital flows inthebalance ofpayments
	The short-term outlook
		Table 9.  Short-term projections
II. Macroeconomic management
	Monetary policy
		Figure 9. The Forint in its fluctuation band
		Interest and exchange rate developments
			Figure 10. Interest rate developments
			Figure 11. Monetary conditions
			Figure 12. Yield curves
		Money and credit growth
			Figure 13. Exchange rate interventions
			Box 3. Changes in the compulsory reserve requirement
			Table 10. Money andcredit
		Policy options
	Fiscal policy
		Measurement issues
			Box 4. Off-budget quasi-fiscal instruments
			Table 11. Alternative measures ofthegeneral government balance
			Table 12. General government accounts, OECD basis
			Table 13. Gross public debt
		The 1999 and 2000 budgetary outcomes
			General government
				Figure 14. Cumulative central government balance
				Table 14.  Consolidated general government revenue and expenditure, OECD basis
			Central government
				Table 15. Central government accounts – unconsolidated, GFS basis
			Social security
				Table 16. Balance ofthesocial security funds, GFS basis
			Local governments
				Table 17.  Local government accounts, GFS basis
		The 2001-02 budget
			Box 5. The Széchenyi plan
			Table 18. The medium-term budget outlook
	Assessment
III. Progress in structural reform
	Table 19. Structural surveillance
	Product markets
		Privatisation
			Table 20. Companies managed byÁPV Rt., bysector
		Foreign direct investment
			Figure 15. Foreign direct investment by region
		Trade policy
			Table 21. Geographical breakdown oftrade flows
		Network industries
			Telecommunications
			Electricity
			Gas and oil
		Sustainable development
		Summing up
	Financial markets
		The banking sector
			Figure 16. Real credits
			Figure 17. Sectoral interest rates
			Table 22. Outstanding loans byrisk category
			Box 6. Postabank
			Table 23.  Pre-tax net earnings in the banking sector
			Table 24. Breakdown ofbanking assets byownership
			Box 7. Non-bank credit institutions
		The stock market
			Table 25. Central andeastern European stock markets
			Figure 18. Liquidity of the Budapest Stock Exchange
			Figure 19. Regional stock market indices
		Financial market supervision and regulation
		In sum
	Labour market policy
		Recent developments
			Figure 20.  Regional labour markets
			Wage setting
				Figure 21. Wage drift
				Table 26. Monthly earnings byeducational attainment intheprivate andpublic sectors
				Figure 22. Minimum wage developments
			Unemployment and related benefits
			Working-time flexibility
			Active labour market policies
			Education and training
		Scope for further action
	Public sector
		Tax policy
			Box 8. Chronology of major tax reforms
			The tax system in an international context
				Figure 23. The overall tax burden in OECD countries
				Table 27. The structure oftaxation bytype oftax
			Personal income tax
			Self employed
			Social security contributions
				Table 28.  Social security contributions of top wage earners
			Indirect taxes
				Table 29. VAT productivity andeffective VAT rates
				Figure 24. Distribution of the implicit VAT subsidy
			Corporate income tax
				Table 30. Tax incentives
				Table 31.  Required pre-tax rates of return to capital in manufacturing (cost of capital)
				Figure 25. Average tax rates by level and type of income
			Local government taxes
			Tax administration
				Table 32. Tax arrears
			Discussion
				Box 9. Tax policy and EU accession
		Healthcare
			Figure 26. Life expectancy
			Box 10. Managed-care pilot project
			Looking forward
IV. Coping with ageing
	Introduction
	The scale of the demographic problem
		Table 33.  Fertility and life expectancy
		Box 11. The impact of different demographic assumptions
		Figure 27. Population scenarios
		Figure 28. Demography and employment
		Figure 29. Employment/population ratios for men and women
	Public support for the elderly
		The healthcare system for the aged
		Social assistance for older persons
			Figure 30. Pension benefit recipients by type of benefit
		The old-age pension system
			Table 34. Participation inmandatory private pension funds
			Box 12. The social-security pension system
			Box 13. The privately managed pension funds
	The economic implications of ageing under existing institutional arrangements
		Macroeconomic implications
			Table 35. Growth rates ofemployment, productivity andGDP
			Table 36.  Membership and assets of Hungarian pension funds
		Fiscal impacts
			Figure 31. Dependency ratios
		Healthcare expenditure
			Figure 32. Demand for health services
		Social assistance spending
		Public pensions
			Figure 33. Social security deficit: sensitivity to employment and productivity growth
			Figure 34. Social security deficit: sensitivity to demographic assumptions
			Figure 35. PAYG balance with lower contribution rates
	Policy priorities
		Structures and institutions for the elderly population
		Fiscal consolidation
			Figure 36. The evolution of healthcare supply
		Employment enhancing policies
			Box 14. The Romani minority
			Figure 37. Sensitivity of the PAYG balance to revenue-enhancing reforms
		Creating a co-ordinated policy framework
	Summing up
		Box 15. Increasing prosperity in an ageing society: an overview of recommendations
Notes
Glossary
Bibliography
Annex I: Operations of the NBH
	Table A1.  Instruments of the NBH applied on a regular basis
Annex II: General government accounts: cash-flow versus accrual concepts
Annex III: Potential output growth until 2005
	Table A2.  Sensitivity analysis
	Notes
Annex IV: Medium-term projections
	Table A3. Direct costs oftax andspending measures
Annex V: Calendar of main economic events
Statistical annex and structural indicators
	Table A. Selected background statistics
	Table B. Supply anduse ofresources
	Table C.  Labour market indicators
	Table D. Costs andprices
	Table E. Monetary indicators
	Table F.  Balance of payments
	Table G. Financial markets
	Table H. Non-financial corporations withdouble entry book-keeping
List of Boxes
	Box 1. The government’s 2000 anti-inflation programme
	Box 2.  Accounting for trade on an accruals basis in the balance of payments
	Box 3.  Changes in the compulsory reserve requirement
	Box 4.  Off-budget quasi-fiscal instruments
	Box 5.  The Széchenyi plan
	Box 6.  Postabank
	Box 7.  Non-bank credit institutions
	Box 8.  Chronology of major tax reforms
	Box 9.  Tax policy and EU accession
	Box 10.  Managed-care pilot project
	Box 11.  The impact of different demographic assumptions
	Box 12.  The social-security pension system
	Box 13.  The privately managed pension funds
	Box 14.  The Romani minority
	Box 15.  Increasing prosperity in an ageing society: an overview of recommendations
List of Tables
	Table 1.  Quarterly gross domestic product
	Table 2.  Quarterly gross domestic product by sector
	Table 3.  Regional labour market developments
	Table 4.  Earnings per employee
	Table 5.  Current account of the balance of payments
	Table 6.  Merchandise trade balance on a cash-flow and accruals basis
	Table 7.  Financial account of the balance of payments
	Table 8.  Capital flows in the balance of payments
	Table 9.  Short-term projections
	Table 10.  Money and credit
	Table 11.  Alternative measures of the general government balance
	Table 12.  General government accounts, OECD basis
	Table 13.  Gross public debt
	Table 14.  Consolidated general government revenue and expenditure, OECD basis
	Table 15.  Central government accounts – unconsolidated, GFS basis
	Table 16.  Balance of the social security funds, GFS basis
	Table 17.  Local government accounts, GFS basis
	Table 18.  The medium-term budget outlook
	Table 19.  Structural surveillance
	Table 20.  Companies managed by ÁPV Rt., by sector
	Table 21.  Geographical breakdown of trade flows
	Table 22.  Outstanding loans by risk category
	Table 23. Pre-tax net earnings in the banking sector
	Table 24. Breakdown of banking assets by ownership
	Table 25.  Central and eastern European stock markets
	Table 26.  Monthly earnings by educational attainment in the private and public sectors
	Table 27.  The structure of taxation by type of tax
	Table 28.  Social security contributions of top wage earners
	Table 29.  VAT productivity and effective VAT rates
	Table 30.  Tax incentives
	Table 31.  Required pre-tax rates of return to capital in manufacturing (cost of capital)
	Table 32.  Tax arrears
	Table 33.  Fertility and life expectancy
	Table 34.  Participation in mandatory private pension funds
	Table 35.  Growth rates of employment, productivity and GDP
	Table 36.  Membership and assets of Hungarian pension funds
	Tables Annexes
		Table A1.  Instruments of the NBH applied on a regular basis
		Table A2.  Sensitivity analysis
		Table A3.  Direct costs of tax and spending measures
	Tables: Statistical Annex and Structural Indicators
		Table A.  Selected background statistics
		Table B.  Supply and use of resources
		Table C.  Labour market indicators
		Table D.  Costs and prices
		Table E.  Monetary indicators
		Table F.  Balance of payments
		Table G.  Financial markets
		Table H.  Non-financial corporations with double entry book-keeping
List of Figures
	Figure 1.  Macroeconomic performance
	Figure 2.  The climate in the private sector
	Figure 3.  Employment, unemployment and the labour force
	Figure 4.  Consumer price developments
	Figure 5.  Components of inflation
	Figure 6.  Trade performance
	Figure 7.  Customs versus balance of payments trade data
	Figure 8.  Cumulative current account deficit
	Figure 9.  The Forint in its fluctuation band
	Figure 10.  Interest rate developments
	Figure 11.  Monetary conditions
	Figure 12.  Yield curves
	Figure 13.  Exchange rate interventions
	Figure 14.  Cumulative central government balance
	Figure 15.  Foreign direct investment by region
	Figure 16.  Real credits
	Figure 17.  Sectoral interest rates
	Figure 18.  Liquidity of the Budapest Stock Exchange
	Figure 19. Regional stock market indices
	Figure 20.  Regional labour markets
	Figure 21.  Wage drift
	Figure 22.  Minimum wage developments
	Figure 23.  The overall tax burden in OECD countries
	Figure 24.  Distribution of the implicit VAT subsidy
	Figure 25.  Average tax rates by level and type of income
	Figure 26.  Life expectancy
	Figure 27.  Population scenarios
	Figure 28.  Demography and employment
	Figure 29.  Employment/population ratios for men and women
	Figure 30.  Pension benefit recipients by type of benefit
	Figure 31.  Dependency ratios
	Figure 32.  Demand for health services
	Figure 33.  Social security deficit: sensitivity to employment and productivity growth
	Figure 34.  Social security deficit: sensitivity to demographic assumptions
	Figure 35.  PAYG balance with lower contribution rates
	Figure 36.  The evolution of healthcare supply
	Figure 37.  Sensitivity of the PAYG balance to revenue-enhancing reforms