Hungary net gov’t financing requirement 4.8% of GDP in four quarters ending Q1

The financing requirement as a percentage of the quarter's GDP fell from an upward revised 6.3% in Q4 last year.

 Seasonally adjusted financing requirement was 5.3% of GDP in Q1, slightly down from 5.5% in Q4 2011.

Gross state debt, under the Maastricht definition, fell from 80.6% of GDP, at the end of Q4 2011 to 79.0% at the end of March 2012.

In nominal terms, Maastricht debt dropped HUF 294 billion in Q1 to HUF 22,399 billion at the end of March. Transactions raised the debt by HUF 300 billion while the weakening of the forint reduced it by HUF 594 billion in the period.

The MNB noted that early fx mortgage repayments at a preferential rate under a government scheme affected the general government (as well as household's) net capacity both in Q4 last year and Q1 this year. The general government gave a capital transfer worth HUF 49 billion in Q4 and HUF 55 billion in Q1 to households through footing part of the losses – of HUF 174 billion in Q4 and HUF 196 billion in Q1 – banks suffered on the scheme.

Hungary's general government had net financing requirement of 5.3% of GDP for the full last year, excluding the effect of transfers of private pension fund assets to the state, NBH figures show. Including the pension assets transfer – a capital transfer from households to the government, worth 9.5% of GDP – Hungary had a general government net financing capacity of 4.2% of GDP in 2011.

The 2011 financing requirement was revised up 0.1 percentage-point and the financing surplus was revised 0.1 percentage point down from the ratio reported on April 2.