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Corporate borrowing jumps to 8.4% of GDP

Net borrowing of Hungarian non-financial businesses jumped to HUF 562 billion, or 8.4% of GDP, in the third quarter of 2008, far above the comparable HUF 231 billion, or 3.5% in terms of GDP, in Q2 last year, the Central Bank’s (MNB) financial account report published on Monday shows.

In the same period a year earlier, that is in Q3 2007, net corporate borrowing was HUF 315 billion, or 3.1% of GDP, though amounted to HUF 602 billion, or 9.9% of GDP, in Q1 last year.

In the third quarter, gross borrowing of the business sector rose to HUF 804 billion, from a slight HUF 169 billion in the previous quarter, to 12% of the quarterly GDP, compared to just 2.5% of GDP in Q2 2008. The bulk of Q3 borrowing came from HUF 638 billion in loans, including HUF 586 billion in long-term loans.

In the twelve months to the end of the third quarter of 2008, net borrowing of non-financial businesses amounted to HUF 1,710 billion, or 6.5% of GDP. (MTI - Econews)