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MNB: Hungaryʼs net external financing capacity at 10% of GDP in Q2

Telco

Photo by Feng Yu / Shutterstock.com

Adjusted for seasonal effects, Hungaryʼs net external financing capacity was €2.685 bln or 10% of quarterly GDP in the second quarter, balance of payment data published today by the National Bank of Hungary (MNB) show.

The adjusted Q2 surplus changed minimally from the first quarter when it reached 11% of GDP. It was up €1.59 bln from a year earlier.

The unadjusted net external financing capacity came to €2.331 bln in the second quarter, down from the first quarter mainly due a lower surplus on goods.

Net transfers from the European Union totaled €1.908 bln in Q2, up €557 mln from the previous quarter and up €859 mln in one year, the accrual-based figures show. Of the total, current EU transfers reached €503 mln, rising about €200 mln from January-March, and capital transfers reached €1.406 bln, rising €360 mln from Q1.

The current account surplus reached an unadjusted €1.042 bln in Q2.

Adjusted for seasonal effects, the current account surplus came to €1.177 bln, down €195 mln in a quarter. Practically all the drop came from a shrinking surplus on the trade of goods with both exports and imports expanding at a healthy pace for the second quarter in a row.

Foreign direct investment (FDI) of Hungarian investors rose €11 mln in Q2 while foreign investors direct investments in Hungary fell €1.371 bln in the period, figures of the financial account show.

The Q2 figures reveal that foreign investors withdrew net €1.348 bln from their FDI in shares, nearly half of which came from dividends paid out from previous yearʼs profits. Their reinvested profits fell by a further net €1.185 bln. Their liabilities on debt instruments within FDI rose net €1.162 bln. The balance was unaffected by €918 mln of capital in transit.

Hungarian investorsʼ FDI into shares rose €588 mln, even after a 74 mln drop due to paying out dividends from previous yearʼs profits. They reinvested profits of €62 mln in their foreign investments in Q2 while they took €639 mln repayment on debt-type investments.

Net assets of portfolio investments in Hungary rose €1.728 bln in the quarter, almost €700 mln more than in Q1. The bulk of the Q2 rise reflected foreign investorsʼ disinvesting €2.010 bln of Hungarian government securities.

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