RFE/RL Daily Report
                                     No. 136, 20 July 1994


CHANGES IN HUNGARIAN DEFENSE MINISTRY. The new leadership of the
Hungarian defense ministry was introduced on 18 July in the
presence of President Arpad Goncz and the new chairman of the
parliamentary defense committee, Imre Mecs (Alliance of Free
Democrats), MTI reported. Both defense minister Gyorgy Keleti and
his political state secretary, Andras Toth, belong to the
Hungarian Socialist Party. Colonel Jozsef Feher was appointed
administrative state secretary for defense with the rank of major
general, and deputy administrative secretary Maj. Gen. Jozsef
Kelemen was replaced by Lt. Gen. (retired) Laszlo Borsits,
chief-of- staff until 1991. Keleti listed three sources of threat
to regional security, namely the different sizes of the regular
armies of the region; civil war conflicts and differences over
nationality issues; and ongoing mass migration in the region.
Alfred Reisch, RFE/RL, Inc.

UNCERTAIN HUNGARIAN ECONOMIC PROSPECTS FOR 1995. According to a
report by the Kopint-Datorg economic research firm, Hungary cannot
in the short term improve its external balance of payments by
means of budgetary measures, MTI reported on 19 July. Should
exports improve, the current balance of payments deficit could be
reduced by $2 billion next year, but the budget deficit will still
be at least 400 billion forint and tax revenues will not
significantly increase. Should Hungary's GDP grow by 2%-3%, the
GDP-budget deficit ratio will not be significantly reduced.
Because of the high budget deficit, the inflation rate cannot fall
much below 20% and the level of unemployment will continue to
stagnate, the report concludes. Alfred Reisch, RFE/RL, Inc.


  [As of 1200 CET]
  Compiled by Keith Martin and Stan Markotich
Copyright 1994, RFE/RL, Inc. All rights reserved.