Hungary state debt ratio falls in Q2 

Debt

Hungary's state debt relative to GDP fell to 77.6% at the end of Q2 after reaching 81% in the previous quarter, lifted by government expenditures related to the coronavirus pandemic, preliminary data released by the National Bank of Hungary (MNB) on Tuesday show. 

The ratio was up from 70.3% at the end of Q2 2020.

In absolute terms, state debt reached HUF 39.406 trillion at the end of Q2.

Hungary's constitution stipulates that year-end state debt relative to GDP must decline until the ratio reaches 50%, but the government anticipated the level would rise last year because of spending on pandemic defense and economic stimulus. Amendments to this year's budget show the state debt ratio falling to 79.9% at end-2021.

MNB data show the general government's net financing requirement - a good approximation for the general government deficit - reached HUF 366 bln in Q2, the equivalent of 2.7% of quarterly GDP.

At the same time, households' net financing capacity reached HUF 433 bln, the equivalent of 3.2% of quarterly GDP. Households' net financial assets stood at 113% of GDP at the end of June.

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