Surplus on trade widens, capital transfers from EU rise in May

MNB

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Hungaryʼs trade surplus neared EUR 1.2 billion in May, and was up EUR 115 million from April as a rising surplus on the trade of services more than offset a shrinking surplus on the trade of goods, monthly preliminary balance of payment data published by the National Bank of Hungary (MNB) yesterday show.

Capital transfers from the the European Union were nearly four times of their April value in May at EUR 381 mln, and overall EU transfers rose to EUR 491 mln from EUR 165 mln. Capital transfers overall showed a similar pattern.

In April-May combined, net EU transfers were almost double of their low first-quarter value, of which capital transfers alone rose by more than 240%, the monthly MNB figures, which give a first hint on balance of payment developments, show. 

The current account surplus widened to EUR 630 mln in May and the countryʼs net external financing capacity — calculated as the combined balance of the current and capital accounts — nearly doubled in a month to EUR 1.01 bln.

The April-May current account, at EUR 1.2 bln, was near to the respective Q1 figure while the external financing capacity of the two months exceeded the figure for the first three months by EUR 350 mln.

The monthly financial account indicates that the governmentʼs payout of advances to successful applicants of EU funding rose markedly in May as the "other government receivables" — the item including such advances — rose almost fourfold from April to nearly EUR 340 mln. At the same time, the volume of EU funding received by the government from Brussels but yet owed to grant winners fell just EUR 5 mln in May after dropping EUR 59 mln in the previous month . 

Net liabilities of Hungary on direct capital investments dropped by EUR 230 mln in May, somewhat more than in April after as a balance of EUR 434 mln Hungarian direct investment abroad and EUR 663 mln of incoming FDI. Excluding profit in transit and assets portfolio adjustments, Hungarian businesses made EUR 231 mln direct investment and foreign investors invested EUR 461 mln in Hungary in May. FDI in both direction fell from April.

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