Hungary net financing requirement 1.9% of GDP in Q1


General government net financing requirement amounted to HUF 1,262 billion, or 4.4% of Hungary’s GDP in the four quarters through Q1 this year, and it was HUF 124 billion, or 1.9% of quarterly GDP, in Q1, the National Bank of Hungary (MNB) said based on preliminary financial accounts data on Thursday.

Hungary's general government net financing requirement rose to 5.1% of GDP in the fourth quarter of 2011 and reached 4.5% of GDP for the full year, excluding the effect of transfers of private pension fund assets to the state. Including the pension assets transfer, Hungary had a net general government financing capacity of 5.0% of GDP in 2011.
At the end of Q1, general government consolidated gross debt at nominal value, or Maastricht debt, was HUF 22,397 billion, equivalent of 78.9% of GDP, based MNB's own GDP estimate. Transactions increased the debt by HUF 231 billion and the appreciation of the forint reduced it by HUF 526 billion. Net liabilities of the general government amounted to HUF 15,112 billion or 53.2% of GDP at the end of Q1.
Previously, gross general government debt, under the Maastricht definition, fell from 82.6% of GDP at the end of Q3 2011 to 80.3% of GDP, or HUF 22,649 billion, at the end of Q4 2011. Net general government debt stood at HUF 14,384 billion or 51.0% of GDP at the end of 2011.
In Q1 this year, net borrowing of central government amounted to HUF 203 billion.
On the assets side, loans, quoted shares, mutual fund shares and other assets fell significantly, while deposits and holdings of debt securities rose due to transactions.
On the liabilities side, the increase in holdings of government securities and the declines in foreign borrowing and other liabilities were dominant. Net lending of local government authorities amounted to HUF 89 billion. On the assets side of the balance sheet, deposits with credit institutions rose sharply. On the liabilities side, bond and loan liabilities declined sharply and other liabilities increased due to transactions. Net borrowing of social security funds was HUF 10 billion. Within their assets and liabilities, respectively, other assets and loans fell, the MNB said.


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