Hungary govt debt rises to 82.2% of GDP by end of Q1 on weaker forint, borrowing, MNB says
Hungary's gross state debt, calculated at nominal value according to the Maastricht definition, rose to 82.2% of GDP at the end of March from 79.2% of GDP at the end of 2012, boosted evenly by net borrowing and the weaker forint, the National Bank of Hungary (MNB) reported based on preliminary financial account data on Friday.
General government net financing requirement – which is a good approximation of the ESA '95 general government deficit – rose to 3.7% of GDP in the first quarter. The ratio was the highest since Q4 2011, but was mostly boosted by seasonal factors, adjusted figures show.
Net borrowing raised gross debt by HUF 491 billion and the weaker forint raised it by HUF 468 billion in the first three months to HUF 23,340 billion at the end of March.
The gross debt ratio surpassed 80% for the first time since the end of 2011, and was the highest since 83.4% at the end of September 2011. It rose now for the second quarter after dropping steadily between September 2011 and September 2012.
The debt ratio peaked at 85.3% in the middle of 2010, and dropped temporarily under 80% in 2011 on a transfer of private pension fund assets, worth more than 9% of GDP, to the state in spring 2011.
Net general government debt stood at HUF 17,339 billion or 61.1% of GDP at the end of March. The net debt ratio has risen steadily after hitting a low at 52.8% at the end of 2011.
General government net financing requirement was HUF 240 billion or 3.7% of the period's GDP in the first quarter. The quarterly ratio bottomed out well under 2% in the second and third quarters of last year before rising to 3.1% in Q4 2012.
The first-quarter net financing requirement was only 1.8% of GDP, if adjusted for seasonal factors, and rose only slightly, from 1.7% in the previous quarter, adjusted MNB figures show. The seasonally adjusted ratio dropped steeply in Q2 last year and has moved between 1.7% and 2.0% since.
Net general government financing requirement in the four quarters ending Q1 2013 was 2.3% of GDP, up from 2.0% in 2012. The four-quarter shortfall rose more steeply, to 2.4% of GDP from 1.9% in 2012, if adjusted for the pension transfers, which continued, albeit at a much smaller scale, in 2012, as well as the early mortgage repayment scheme.
The four-quarter net financing requirement dropped to the 3%-of-GDP EU criterion in the third quarter of 2012 for the first time since Q3 2008.
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