In this chapter we shall analyse macroeconomic processes of the period between the first quarter of 1990 and the last months of 1991. The target is to describe the transition process from a centrally planned to a market economy. The structure of the survey starts with a brief description of political and social conditions influencing the Hungarian economy. Thereafter, looking at the main economic indicators, we shall evaluate the performance of the Hungarian economy and the effectiveness of the governmental policies. At the end of the survey we shall evaluate indicators measuring the extent and speed of the transition process. We shall focus on processes which took place in 1991 (with special emphasis on the latter part of the year).