State debt at 73.6% of GDP at end of 2017


Hungaryʼs gross consolidated state debt, calculated according to Maastricht rules and including the liabilities of state-owned Magyar Eximbank, stood at 73.6% of GDP at the end of 2017, down from 76.0% at the end of 2016, show preliminary data released by the National Bank of Hungary (MNB) on Tuesday.

Excluding Magyar Eximbank, the debt was 71.7% of GDP, down from 73.9% a year earlier, national news agency MTI reported.

The MNB recently started publishing separate state debt ratios, with and without the balance sheet of Magyar Eximbank, in line with a decision by Eurostat, the EUʼs statistics office, which has maintained for years that the state-owned export financing institution should be reclassified inside the general government sector, raising state debt.

The MNB said the ratio including the assets of Magyar Eximbank was "supplementary," but would serve as the "main indicator" of Hungaryʼs reported Maastricht state debt. It added that the inclusion of the lender in the data would "not significantly modify" the net financial worth or net liabilities of the general government.

The net general government financing requirement, which MTI noted is a good approximation of the general government deficit, was HUF 721 billion in 2017, equivalent to 1.9% of GDP, the central bankʼs data show. The net financing requirement rose from 1.7% of GDP in 2016.

About 90% of the full-year deficit originated in Q4, when the net general government financing requirement jumped to HUF 651 bln, or 6.1% of quarterly GDP. The big gap in Q4 followed a surplus in Q1, a negligible deficit in Q2, and a 3.2% deficit ratio in Q3.

Adjusted for seasonal effects, the Q4 general government net financing requirement was 5.1% of GDP.

Nearly all of the 2016 deficit was similarly booked in the last quarter of that year, MTI noted.

In absolute terms, Hungaryʼs gross consolidated state debt stood at HUF 27.36 trillion at the end of 2017, excluding Eximbankʼs balance sheet. Transactions raised the debt by HUF 338 bln and revaluations raised it by HUF 52 bln.

Eximbankʼs balance sheet raised gross consolidated state debt by about HUF 736 bln to HUF 28.096 tln, the MNB data show.

Net liabilities of the general government stood at HUF 24.133 tln, or 63.2% of GDP at the end of 2017, down from 66.1% one year earlier.


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