ÁSZ head urges further incentives for retail gov't securities


László Domokos, the chairman of the State Audit Office (ÁSZ), put incentivizing households' savings in government securities among the state's "most important tasks" in an interview published in on Monday.

Domokos said efforts to raise the share of state debt held by Hungarian households in 2011-2019 was "among the greatest achievements" of fiscal policy, adding that as yields climb in tandem with rising inflation, the resulting higher interest expenditures for the state "make Hungarian holders of those securities richer, not foreign investors".

"That's why I think incentivizing household savings invested in government securities is among the most important tasks," he added.

He suggested further incentives could involve making it easier to buy securities at the post office or branches of the State Treasury.

Expanding the offering of government securities to include green bonds or securities to finance other state tasks, such as stockpiling, boosting energy efficiency, building roads and railways or digitalizing the state administration system, "would make sense", he added.

Domokos said yields for the various maturities available to retail investors should be reviewed to ensure they remain competitive while putting long-term savings "in the spotlight". He added that the offering of retail government securities should be "tailored to the behavior and needs" of households.

He pointed out that yields that stay in the country support an improvement in the current account balance.

He noted that ÁSZ recently published a report which shows that, "optimally", Hungary's current account should be "balanced or with a slight surplus". He added that recent current-account deficits are due, in part, to the "slower-than-planned" arrival of European Union funding.

Domokos said a "small" current-account deficit for 1-2 years is "no catastrophe" if it is caused by growing FDI that temporarily raises imports as investments are undertaken.

 He added that, "ideally", the highest share possible of the country's export capacity should be in domestic ownership.

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