A shot in the arm came when Mire Kertszu' was selected for Nobel Prize. It came as a double hit. That announcement rang in simultaneously with firm hints from Brussels at the country's early euro the European union. 

In more ways than one Kertszu personifies Hungary's dazzling cultural superstructure. The economic realities on the ground are equally impressive. There is no indication so far that Hungary suffered structural damage under Soviet rule. Given its solid industrial basis, meet the unfolding challenges are not menacing.

Hungary is certified the seventeenth among world's most globalised countries. Its foreign trade works out at 131 percent of the GDP. On that score it is ahead of other European countries. For the world at large, it is only 53 percent. The trade sector is on fast trade because of the high levels of foreign direct investments (FDI). On the latest tally FDI topped Euro 26.8 billion. Per capita, it is the highest for Central and Eastern Europe. Bulk of the FDI goes into high-tech manufacturing industries, especially automotive and electronic which account for 45 percent of the exports.

Hungary is on way to an enhanced role in the bigger European Union. Budapest, (the capital) is central Europe's largest city and it is in full view of 240 million people within a radius of 1000 kilometers. No surprise therefore that EU takes in 75 per cent of the Hungarian exports. As for the Hungarian imports, 58 per cent comes from the Euroland. The multinationals were the first to note Hungary's this locational advantages. As many as 380 of the Fortune -500 firms are there. A bi-lingual population and top line management class are other incentives.

Hungry is working hard for the EU membership. Since 2001 inflation has dropped 10 percent from a year to 4.8 percent. By 2002, it reached the convergence criteria prescribing les than 3 percent inflation. Political compulsions, however, fuel a demand push. The national minimum wage is Euro 211 per month. The public sector wages are up by 30 percent. As the result the 2002 budget deficit soared 9 percent. Even so it is all not that bad, say some observers. The resulting surge in domestic demand is helpful.

How the reflationary pressures affect Hungarian exports? The country's competitiveness certainly hit. 70 percent of its decline came from wage growth and 30 per cent from appreciation of its currency, forint.On balance, however, the damage is limited. The Hungarian productivity is only 85 percent of the European Union average. At the same time, its wages are 25 percent lower. The situation needs constant watch. Forint is moves within a band of 15 percent on either side of the central parity. Appreciating in normal terms by over 11 per cent against the euro and over 19 per cent against the dollar, the foreign exchange deals are dangerously close to the upper limits. This leads to a steady fall in Hungary's export growth. From 21.8 percent in 2000 it slithered down to 9.1 per cent in 2001 and six per cent in 2002. As a result, the current account deficit more than doubled to around 6 percent.

To be sure Hungarians are at eh job of tidying up the economy. Efforts are on to cap real wage growth at 4.5 per cent. The inflation targets are also so fixed to sustain a grown rate of 3.5 percent in 2004. 

All told, Hungary has been certified as most stable among emerging economies. Its score on the political risk scale is 73 out of 100, according to the index compiled by Lehman Bros. and the Eurasia group. It is well ahead of Poland with 72, Mexico 69 and Russia with less than 60.