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Government steps up payouts of advances on EU funding

MNB

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Hungaryʼs government started paying out advances to recipients of European Union funding in earnest in July, the latest monthly balance of payment data compiled by the National Bank of Hungary (MNB) suggests, as reported by Hungarian news agency MTI yesterday.

Government advances to recipients of EU funding are the biggest item among "other government receivables" on the financial account, which rose a marked gross EUR 441 million and net EUR 434 mln in July. There were practically no such advance payments in the second quarter, and just EUR 154 mln in Q1. 

Gábor Danyi, deputy state secretary at the Prime Ministerʼs Office, said at a conference of economists at the weekend that the government had so far this year paid out HUF 244 billion in EU monies from the 2007-2013 funding cycle, and a further HUF 502 bln from the 2014-2020 cycle, Portfolio.hu reported.

Unlike the MNB data, the payouts include state co-funding as well as advances on EU funding.

Hungaryʼs government earlier announced plans to front-load the funding for the 2014-2020 cycle.

The MNB data show net inflows from the EU reached EUR 517 mln in July, including EUR 338 mln of capital transfers. In January-June, net transfers came to a combined EUR 836 mln and included more than EUR 500 mln in capital transfers.

The sizable EU transfers were the main factor behind Hungaryʼs high net external financing capacity of EUR 1.119 bln in July. The figure included a current account surplus of EUR 782 mln.

Net external financing capacity was almost EUR 2.1 bln in Q2, the monthly data show. The current accountʼs contribution came to EUR 1.98 bln.

The monthly balance of payments data contain estimates and may be revised. The MNB makes the monthly data available until the release of quarterly data. Quarterly data on Q2 are set to be released on September 23.

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