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Hungary state debt at 70.1% of GDP at the end of Q1

Hungaryʼs state debt stood at 70.1% of GDP at the end of March, down from 70.8% of GDP at the end of December 2018, the National Bank of Hungary (MNB) said today, based on a preliminary reading of Hungaryʼs financial accounts, Hungarian news agency MTI reports.

The state debt ratio in Q1, including Eximbank data, fell from 73.7% compared to the same period a year earlier.

Excluding Eximbank, the state debt ratio would have reached 68.3% of GDP at the end of Q1 2019, down from 71.8% a year earlier.

The MNB in 2018 started publishing separate state debt ratios, with and without the balance sheet of Magyar Eximbank, in line with a ruling by Eurostat. The EU-wide statistical body has for years maintained that that Magyar Eximbank should be reclassified inside the general government sector, raising state debt.

In nominal value, state debt was equivalent to HUF 29.382 trillion at the end of Q1. It rose from HUF 29.042 tln at the end of Q4 and from HUF 28.110 tln from a year earlier.

In the first quarter, net borrowing increased the nominal figure by HUF 340 bln, as transactions raised the stock by HUF 320 bln and revaluations by HUF 20 bln.

Net liabilities of general government amounted to HUF 24.132 tln or 56.1% of GDP at the end of Q1.

Net Financing

The net financing requirement of the general government, which is a good approximation of the general government deficit, was HUF 721 bln or 1.7% of GDP in the four quarters to the end of Q1. General government net lending was HUF 182 bln in the first quarter itself, equalling 1.8% of quarterly GDP.

In Q1 2019, net borrowing of central government was HUF 46 bln. Transactions increased financial assets as the stock of deposits with the central bank rose. There was also a modest increase in long-term loans and other accounts receivable. The stocks of securities held by the central government and short-term loans declined. On the liabilities side there was a substantial bond issuance in Q1. 

Net lending of local governments was HUF 242 bln in Q1. Due to transactions, the sectorʼs financial assets rose significantly, reflected by the increase in deposits with credit institutions and significant purchases of government securities. On the liabilities side, short-term loans were repaid and only their other liabilities grew slightly.

Net borrowing of the social security funds was HUF 14 bln.

Net lending of households, at HUF 2.291 tln, was equivalent to 5.3% of GDP in the four quarters to Q1. In Q1 alone net lending stood at HUF 385 bln, equivalent to 3.8% of quarterly GDP. 

Within householdsʼ financial assets there was a significant increase in debt securities issued by the central government. Within liabilities, the stock of forint housing loans rose significantly due to transactions, and that of consumer loans and other loans also increased, but to a lesser degree.