Net external financing capacity up in Q2

MNB

jessica fejos

Hungaryʼs net external financing capacity - the combined surplus of the current and capital accounts - rose to EUR 3.122 billion in the second quarter on a high inflow of European Union funding and a rising surplus in the foreign trade of goods, a report released by the National Bank of Hungary (MNB) on Wednesday shows.

Adjusted for seasonal effects, the net external financing capacity reached EUR 2.783 bln, or 9.2% of quarterly GDP.

The unadjusted surplus more than tripled from Q1, and was up nearly EUR 800 mln year-on-year.

The rise was less but still sizeable -EUR 1.278 bln quarter-on-quarter and EUR 654 mln year-on-year - if adjusted for seasonal factors.

Net transfers from the EU jumped about EUR 1.6 bln in Q2. The seasonally adjusted rise was more moderate: about EUR 300 mln from Q1, and EUR 1.5 bln from the low base in Q2 2016, when the inflow almost came to a halt after the close of the previous EU financing period.

Net inflows from the EU were pushed up by capital transfers, which alone rose by about EUR 1.3 bln both quarter-on-quarter and year-on-year, to EUR 1.391 bln in Q2.

As usual the capital account moved in tandem with the EU transfers, and recorded a sharply higher surplus, of EUR 1.372 bln.

The unadjusted current account surplus widened EUR 798 mln from Q1, but narrowed EUR 514 mln from the same period a year earlier to EUR 1.75 bln. It rose a seasonally adjusted EUR 264 mln from Q1 to EUR 1.434 bln. Most of the change reflected a higher surplus in the trade of goods.

The deficit on primary income widened by little more than EUR 1 bln from Q1 to EUR 1.092 bln, while the deficit on secondary income shrank EUR 35 mln to EUR 239 mln, seasonally adjusted figures show.

The seasonally adjusted surplus in the trade of goods reached EUR 1.258 bln in Q2, widening more than EUR 500 mln from Q1 as exports rose significantly but imports dropped slightly.

The seasonally adjusted surplus in the trade of services narrowed by EUR 127 mln from Q1, to EUR 1.570 bln in Q2. Most of the drop came from services other than tourism, with exports dropping more than imports did.

EU funding transferred to Hungary but still not paid by the government to grant winners dropped EUR 79 mln in the quarter and reached EUR 542 mln at the end of June.

The figures suggest that the government paid out more than EUR 1.4 bln in advance to winners of EU funding, bringing such receivables from the EU to EUR 1.8 bln at the end of June.

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