Official: State debt to fall below 2013-end level


By the end of November the Hungarian state debt will be below its level at the end of 2013 using any possible calculating method, the deputy-CEO of the Government Debt Management Agency (ÁKK) László András Borbély said on state television on Tuesday morning.

The proportion of foreign exchange denominated debt will drop to 35%-37% by the end of this year, depending on the exchange rates, from about 50% three years earlier, Mr Borbely said. This significantly diminishes the risk and exposure to exchange rate fluctuations, he added.

In November repayments will total nearly HUF 1,000 bln, meaning that debt will drop not only as a percentage of GDP but also in nominal terms in the month.

At the start of November Hungary repaid €2 bln or HUF 620 bln on the loan it took out from the European Union (EU) late 2008, while HUF 355 bln worth of discount treasury bills will also expire before the end of the month.

Borbély said that the last instalment on the EU loan, worth €1,5 bln will be paid back in Q2 2016, noting that this is Hungary's cheapest outstanding loan. Hungary drew €12.8 bln of the €20 bln 2008 IMF-EU credit line.

Borbély also noted that a debt measure, published by ÁKK's website weekly does not include every element of state debt, and is about 1.5 percentage lower than the genuine figure. The regularly published ÁKK measure, which covers gross non-consolidated central budget debt, stood at an estimated 77.1% of GDP on November 14.

According to the preliminary statistic of the National Bank of Hungary (MNB) the gross debt of Hungary calculated by the Maastricht criteria was HUF 25,111 bln at the end of September, reaching 83% of GDP. Gross debt stood at HUF 23,068 bln or 80.3% of GDP one year earlier.


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