HUNGARIAN ECONOMIC CONDITIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R000100260004-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: November 9, 2016
• Document Release Date: April 15, 1999
• Sequence Number: 4
• Publication Date: October 1, 1946
• Content Type: IR

Document No. e,
NO CHANGE itir62051.
*ED
Class,
ease 1999/09/08 : CIA4PBRO4AI1000100260004-2
25X1X6
CENTRAL INTELLIGENCE GROUP
INTELLIGENCE REPORT
SU.RJECT Hungarian Economic Co
25X1A6a
ORIGIN
DATE:
is document le,hercl..7y rely-sided to
ENTIAL in accordance wth the
Octol:er W78 tram the
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Director of Co,
25X1A2g
INFO. October 1946
DIST Si October 1946
AGES 2
UPPLOWENT
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CITROL
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_____
The economic situativn in aungary appears favorable with the eurrenoy
apparently stabilieee for the present. There is some trading of minor
money at 13 to 23 forint per dollar among persons needing foreign currency
for trips abroad.
The public is relieved at the passing of the inflation chaos but it is not
confident enough save moeeye The savings accounts on 22 October total-
led 6,500,000 forint against 740,000,000 in circulation.
The Government has reduced the exorbiteet coats of public utilities and is
lowering consumers geode peices by edict. Recent increases in the cost of
social eciourity from 12 to 18 percent is reducing the state income in face
of a sikeable lecendfng deficit. Economists and financiers express a fear
that the budget is being unbalanced too rapidly; they predict :low
tion within eight weeke.
3. With some exceptions, food is plentiful and workers are able to buy at
least the minimum neeeosities. However, an unexpected Soviet demand for
485,000 quintals of vheat has rade the bread situation serious, with ration-
ed flour now being texed with 16 percent corn and ten percent pea. White
wheat flour on the free market is selling at six forint per kilo against
the official price of 1.40. During October white flouroespone can be axe
changed only fnr stager and oil. Onions are selling at two forint against
the official rate of .43, eggs sell for 1.20 against the official 038, and
potatoes were not available at any price between 20 and 26 October.
4. Eggs and poultry are reported to be plentiful, but there is a complete lack
of fodder which is forcing peasants to slaughter their milk cows.
S. Transportation is imeroving and the trains are running on schedule. Coal
production is being :Asrced by unorthodox cutting methods which will mean
decreased production within six months. Industrial concerns are producing
despite high costs in the hopes of cutting costs by increased production.
6. Loans are now obteinnble although they are limited to a period of 40 days.
Manufacturers fear that many of their number will have to cease operation
within 60 days becaueeef a probable inability to offset their present
lessee without more liberal credit terns.
CLASSIFICATION 991421DEN
SPDF
SPDS
SFOT
SiO0
TRB
CONF
NT1AL
Approved For Release 19991 08 : CIA-R
Approved For Release 1999/09/08 : CIA-RDP82-00457R0001002600044X1A2g
CENTRAL INTELLIGENCE GROUP
-2 ,JAFiDENI!![.
70 The public is willing to pay any price for certain badly needed articles,
but there is an inability to buy freely at prevailing price levels. The
textile industry has a surplus of urgently needed yardgoods and is trying
to find an export market which is practically impossible at the present
exchange rate.
8. Foreign trade has been virtually restricted to barter deals. Hungary is
exporting wine, poultry, eggs, and -petroleum products for leather, ore,
coal, coke, lard and sugar. The Government is aware that an exchange rate
modification is needed, but it feats that any move in this direction uould
undermine 6Infideuet in the forint. An export subsidy is 1117ely to be
introduced in the very near future9
rONHDENTIAL
ApproNied For Release 1999/09/08 : CIA-RDP82-00457R000100260004-2