Pandemic spending lifts state debt ratio to 80.4% of GDP

Debt

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Government expenditures related to the coronavirus pandemic lifted Hungary's state debt relative to GDP to 80.4% at the end of the fourth quarter, a second reading of data released by the National Bank of Hungary (MNB) on Wednesday shows.

The ratio rose from 73.9% at the end of Q3 and 65.5% at the end of 2019.

In absolute terms, state debt reached HUF 38.408 trillion at the end of 2020.

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.

The data show the general government's net financing requirement - a good approximation for the general government deficit - reached HUF 3.883 tln, the equivalent of 8.1% of GDP, in 2020.

At the same time, households' net financing capacity reached HUF 2.925 tln, the equivalent of 6.1% of GDP, while non-financial corporations' net financing capacity stood at HUF 740 bln or 1.6% of GDP.

Households' net financial worth was HUF 55.175 tln at the end of 2020.

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