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Analysts note lower surplus on services, expect full-year c/a balance little changed

Analysts asked by MTI were slightly surprised at a lower than expected surplus on the trade of services and noted the rise in income outflow in Q1, but expect a similar current account balance for the year based on National Bank of Hungary (MNB) figures published on Thursday.

Hungary had a current account surplus of €787m and net external financing capacity of €1.272 billion – historical peaks – in Q1 2011, unadjusted MNBfigures published on Thursday showed. The seasonally adjusted current account surplus was €802m and the adjusted net financing capacity totaled €1.161 billion in Q.

Erste Bank's Zoltan Arokszallasi said some lines of the balance were surprising, while some figures, such as the export of services, came in weaker than expected. Arokszallasi said figures show income flowing out of the country, but net export is still much bigger. The analyst expects a whole-year surplus of €1.5-2 billion this year, only slightly down from €2.017 billion last year.

Takarekbank's Gergely Suppan said it is surprising that the surplus of services dropped, while that of hotel services rvenue rose thanks to Hungary's EU presidency. Mr Suppan said economic growth has a positive effect on corporate profits, as reflected by the growing deficit of income balance. Suppan expects a similar current account balance for 2011, but a slightly larger balance, €2.2 billion for 2012 due to car industry investments and expansions in other fields.