Hungary current-account almost in balance in Q1

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The current account surplus in Q1 comes after a EUR 779 mln deficit in Q4 2019 and a EUR 118 mln deficit in Q1 2019.

The trade balance showed a EUR 183 mln deficit in trade of goods, but a EUR 1.45 billion surplus in trade of services in January-March 2020.

Primary income showed a deficit of EUR 869 bln and secondary income a deficit of EUR 403 mln.

The capital account showed a surplus of HUF 567 mln in Q1, including EUR 571 mln in transfers from the European Union. Direct investments contributed a negative EUR 1.25 bln.

Hungaryʼs unadjusted net external financing capacity - the combined balances of the current and capital accounts - reached EUR 569 mln in Q1, compared to a net external financing capacity of EUR 536 mln in Q4 2019 and EUR 207 mln in Q1 2019.

Unadjusted data show the financial account had a deficit of EUR 317 mln in Q1. Direct investments as mentioned showed a deficit of EUR 1.25 bln but portfolio investments had a surplus of EUR 2.83 bln. Other investments rose by EUR 1.09 bln but reserve assets fell by EUR 2.85 bln in Q1.

Hungaryʼs net foreign debt, excluding FDI debt instruments, amounted to EUR 9.1 bln at the end of March, down from EUR 11.7 bln at the end of December and also down from EUR 12.1 bln in March 2019. Net foreign debt was the equivalent of 6.3% of GDP in the four quarters to the end of Q1.

Gross foreign debt stood at EUR 72 bln, down from EUR 75.5 bln in Q4 and down from EUR 77.1 bln in Q1 2019.

The net external financing capacity of the country according to adjusted data was EUR 611 mln in Q1, down from EUR 644 mln in Q4 but up from EUR 254 mln in Q1 2019.

In the first quarter, the balance of the capital account was EUR 567, offsetting the EUR 183 mln deficit in the trade in goods. The primary income deficit of EUR 869 mln improved compared to the previous quarter but the secondary income deficit widened to EUR 403 mln.