Eurostat maintains reservation on MNBʼs foundations

Telco

Eurostat is maintaining its reservation on the way the Hungarian government classifies the foundations of the National Bank of Hungary (MNB) in national accounts statistics, arguing that they should be included in the general government sector, the European Unionʼs statistics office said in a news release on Monday.   

"Eurostat is maintaining the reservation on the quality of the data reported by Hungary in relation to the sector classification of the foundations created by the Hungarian National Bank," the office said in a report on government debt and deficit data, cited by Hungarian news agency MTI. "Eurostat considers that these foundations, including their subsidiaries, should be classified inside general government," it added.

Including the foundations in the general government would lead to estimated retrospective increases in the deficit of HUF 33.7 billion in 2017 (0.1% of GDP), HUF 54.0 bln in 2016 (0.2% of GDP), and HUF 25.3 bln in 2015 (0.1% of GDP), Eurostat said. 

The MNBʼs controversial Pallas Athéné Foundations parted with the last of their investments in government securities earlier in 2018, complying with a position taken by the European Central Bank, which earlier warned that the portfolio "could be perceived as being potentially in conflict with the monetary financing prohibition."

As of September 30, 2018, the foundationsʼ assets comprised HUF 99.4 bln of real estate, HUF 96.2 bln of investment fund units, HUF 55.5 bln of corporate bonds, and HUF 21.1 bln of bank deposits.

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