Record net external financing capacity in Q3, data suggest
Hungaryʼs net external financing capacity rose to EUR 3.89 billion in the third quarter, a new record, as surpluses in both the current and capital accounts rose markedly, Hungarian economic news service MTI-Econews calculated based on monthly preliminary balance of payments data published Tuesday by the National Bank of Hungary (MNB).
Third-quarter net external financing capacity more than doubled from EUR 1.70 bln a year earlier, the preliminary data show.
The monthly data for September offer a preliminary look at Q3 before the MNB publishes the official first reading of data from the quarter on December 23.
Net external financing capacity was EUR 1.77 bln in September alone, up from EUR 1.12 bln in July and from EUR 1.01 bln in August.
Nearly two-thirds of the rise in the countryʼs net external financing capacity in Q3 came from the current account, the surplus of which rose nearly EUR 1.4 bln in one year to EUR 2.39 bln as the surplus in trade of goods and services reached a new record of EUR 3.34 bln.
The surplus on the capital account also rose steeply, more than doubling to EUR 1.50 bln, as net capital transfers from the European Union started to rise year-on-year. These dropped in the first two quarters after the deadline for drawing EU grant money from the 2007-2013 funding cycle passed.
Overall, net transfers from the European Union reached EUR 2.01 bln in Q3, doubling from a year earlier. Within all EU transfers, capital transfers jumped to EUR 1.51 bln from below EUR 700 million, net primary income rose to EUR 273 mln, and the surplus from secondary income rose more than fourfold to EUR 236 mln.
The data show that the Hungarian government transferred net EUR 862 mln to recipients of EU funding as its liabilities for funding transferred from Brussels, but not yet paid out, dropped by about the same amount in Q3. About EUR 805 mln of this amount was transferred in September. Funding transferred from Brussels which had still not been paid to grant winners rose by EUR 668 mln in Q1 and was little changed in Q2.
The data indicate that the government has continued to pay out advances to winners of EU funding, a process launched in July, although the pace of the payouts may have slowed. Such advances are the biggest item among "other government receivables" on the financial account. These rose EUR 635 mln in Q3, after dropping in both Q1 and Q2.
The MNB started releasing monthly balance of payments reports in July 2014. The data comprise estimates that may be revised later and are available on the MNB website until the publication of the official statistics for the full quarter.
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