Pandemic spending lifts state debt ratio to 81.7% of GDP

Debt

Government expenditures related to the coronavirus pandemic lifted Hungary's state debt relative to GDP to 81.7% at the end of the first quarter, preliminary data released by the National Bank of Hungary (MNB) on Monday show, according to a report by state news wire MTI.

The ratio rose from 80.4% at the end of Q4 and 65.8% twelve months earlier.

In absolute terms, state debt reached HUF 39.110 trillion at the end of March.

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 recently submitted to lawmakers by the government shows 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 801 bln in Q1, the equivalent of 7.2% of quarterly GDP.

At the same time, households' net financing capacity reached HUF 937 bln, the equivalent of 8.4% of quarterly GDP.

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