ABSTRACT
World War II left Hungary’s economy and infrastructure devastated; occupation by both the German and the Soviet armies had bled the nation’s resources dry, leading to a state of economic and financial ruin by the end of the war. 1 From 1944 to 1945, the need to rectify and repair the damage brought about by wartime destruction determined Hungary’s situation. During the war forty percent of the country’s national wealth (calculated according to 1938 rates) had been destroyed, a factor that not only defined Hungary’s economic opportunities for many lengthy years to come, but was also further compounded by the obligation to make wartime reparations. 2 In the years following the war, the primary task was to halt hyperinflation—that virtually wiped out the value of the Hungarian pengő, the country’s currency since 1927—and establish a form of currency possessing a stable value. 3 Due to the way in which Hungary’s price and wage systems were distorted in order to bring about the financial stability that resulted from the introduction of a new currency named forint on August 1, 1946, numerous sources of tension and friction remained within Hungary’s postwar financial system, where they continued to test the strength of the nation’s economy throughout future decades. 4
