Trade surplus widens, capital transfers from EU drop in February

MNB

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Hungaryʼs trade surplus neared EUR 950 million in February, up more than EUR 200 mln from January on a rising surplus in the trade of goods; capital transfers from the European Union fell EUR 41 mln from January to EUR 112 mln, monthly preliminary balance of payment data from the National Bank of Hungary (MNB) released last Thursday show.

The current account surplus reached EUR 493 mln in February, rising EUR 173 mln in a month as the monthly surplus on the trade of goods reached EUR 486 mln, rising back to its October-November level after dwindling in December and January.

The surplus in services, at EUR 463 mln, was a touch higher than in January. Among other important items, net transfers from those employed abroad remained stable at EUR 255 mln, while net investment income outflow was also unchanged at EUR 647 mln.

With a capital account surplus of EUR 111 mln, the net external financing capacity reached EUR 604 mln, rising EUR 32 mln as a rising trade surplus was partly offset by lower capital transfers from the EU.

Overall net transfers from the EU reached EUR 132 mln in February, down EUR 104 mln in a month with dropping net current transfers.

The monthly data show that the EU transferred EUR 67 mln in February, and a combined EUR 650 mln in the first two months, of the funds it owed on advances the Hungarian government paid to winners of EU funding, as suggested by the change in "other government receivables" - the item including such advances on the financial account.

At the same time, the volume of EU funding received by the government from Brussels but not yet paid to grant winners also fell, by EUR 150 mln in January and by EUR 12 mln in February. 

Hungaryʼs net liabilities on direct capital investments dropped by EUR 313 mln in February as a balance of EUR 145 mln in Hungarian direct investment abroad and EUR 459 mln of incoming FDI. Reinvested profit in both directions made up the bulk of FDI movements, with only EUR 6 mln of new investments abroad and EUR 30 mln of new direct capital investment in Hungary in February.

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