Hungary central govt debt up in 2011 as weaker forint offsets bulk of securities withdrawal
Gross debt of Hungary’s central government rose HUF 914.5bn last year as the withdrawal of forint securities in private pension fund assets transferred to the state failed to offset a steep rise in foreign currency debt, most of it resulting from a weaker forint, a report on 2011 financing by the National Economy Ministry shows.
Central government debt differs from Maastricht gross government debt as it does not include local government debt and is calculated at market value.
Central government debt rose far less than the HUF 1,734.4bn cash flow-based central government deficit posted last year as some large budget items were financed from already undertaken debt, such as the purchase of MOL shares for HUF 498.6bn from part of Hungary’s 2008 IMF-EU standby agreement that was called down but not used, and debt was cut substantially with the withdrawal of government securities transferred from the private pension fund portfolio.
The securities withdrawals reduced central government debt by HUF 1,407.1bn from the end of 2010, reducing the stock of forint bonds outstanding by HUF 1,186.2bn and the stock of discount T-bills by HUF 219.1bn.
The bulk of the debt reduction from the private pension fund assets was, however, offset by the weakening of the forint, which raised the forint value of foreign currency debt by HUF 1,164.6bn last year, the report showed.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
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.