Pandemic spending lifts state debt ratio to 80.4% of GDP
Image by xtock / Shutterstock.com
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.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.