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General gov’t deficit revised to reflect MKB sale

Deals

Hungaryʼs general government deficit, calculated according to European Union accounting rules, reached HUF 646.7 billion or 1.8% of GDP last year, revised data released by the Central Statistical Office (KSH) show, as reported by Hungarian news agency MTI.

The KSH revised the deficit upward from the figure of HUF 609.7 bln, or 1.7% of GDP, in a preliminary reading released late in March. It attributed the HUF 37 bln difference to the recording of transactions related to the sale of MKB Bank.

The state of Hungary acquired troubled MKB Bank from BayernLB in 2014. The National Bank of Hungary (MNB) restructured the lender and sold it to a consortium of two private equity funds, Blue Robin Investments and METIS Private Capital Fund, together with Hungaryʼs Pannónia Pension Fund, for HUF 37 bln last year.

There have been numerous calls in the Hungarian media for the central bank to reveal information about the buyers, as their background is unclear. Later a private individual filed a request for information on the ownership of MKBʼs buyers, arguing that the lenderʼs shares qualify as public assets and the information should be made public, but the central bank declined to publish the information.

Last October, the Municipal Court of Budapest ordered the central bank to release data of public interest regarding the sale of MKB Bank. The decision was upheld by the Budapest Municipal Appellate Court in March. The court said MKBʼs shares did indeed qualify as public assets and added that the MNB was carrying out a public task when it restructured MKB.

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