According to the MNB, external balance indicators remained favorable throughout 2015, and economic growth continued to be backed by a sustainable financing structure. Net lending now significantly exceeds the values registered in other countries of the region.
Growth in net lending was driven by an increase in export market share, while the trade surplus was also supported by the fall in energy prices. Meanwhile the decline in external debt in recent years and subdued yield levels moderated the deficit on the income balance. Finally, the drawdown of EU funds intensified after the closure of the EU budget period.
In the banking sector net external debt was reduced and with the self-financing program of the MNB and householdsʼ demand for government bonds, the governmentʼs external debt also decreased significantly and corporations continued the repayment of foreign loans.
The governmentʼs borrowing requirement was low, below 2%, and there was a further accumulation of financial savings in the private sector.
Following a sharp decline, by the end of 2015 net outstanding external debt dropped to 25% of GDP. By the end of the year, short-term external debt was reduced to €21 bln, and thus the reserve adequacy of Hungary remains favorable, according to the central bank.
Owing to the decline in maturing debt and to the increase in net lending, the gross borrowing requirement fell considerably in 2015, with Hungary reporting one of the lowest levels among its peers in the region.
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