Hungary’s net external financing capacity €1.97 bln in Q1

Q1 net external financing capacity was down €150 million from a year earlier, the monthly figures show. They offer the first look at Q1 before the MNB publishes the official first reading of quarterly data for the quarter on June 24.  

Net external financing capacity was €988 mln in March alone, up from €632 mln in February 2016 and from €350 mln in January.

The surplus on the current account widened €258 mln year-on-year to €1.63 bln in Q1 while the surplus on the capital account fell €410 mln to €335 mln as the trade surplus rose but capital transfers dropped on the already expected cyclical drop in EU funding granted to new projects.

Overall, net transfers from the European Union reached €370 mln in Q1, dropping almost €550 mln from a year earlier. Within all EU transfers, capital transfers plunged 54% to €340 mln, net primary income dropped 24% and the seasonal Q1 minus on secondary income – which mainly reflects payments into the EU budget – was bigger than usual, the accrual-based payments statistics show.

Net EU transfers were expected to drop after the surge in previous quarters in the utilization of EU funds before the end-of-2015 deadline to draw down on the EU funding available for the 2008-2013 EU budgetary period.

The lower net EU funds inflow was, however, nearly compensated by the growing trade surplus, which rose €420 mln in one year to €2.95 bln in Q1, reflecting a widening surplus on the trade of goods and a slightly lower surplus on services.

The MNB began releasing the monthly balance of payments report in July 2014. The data comprise estimates that may be revised later and are available on the MNB website until the publication of the official statistics for the given quarter.