Hungary's gross state debt increased 13.1% to 14,432.6 billion from the end of 2005 to the end of June 2006, data published by the Finance Ministry shows.
Exchange rate losses due to the weakening forint accounted for Ft 461.2 billion, or 28%, of the Ft 1,667 billion increase. Gross forex debt increased Ft 905.4 billion to Ft 4496 billion in the first half of the year, as the result of Ft 538.2 billion worth of forex bond issues, the receipt of Ft 102.4 billion worth of forex loans, Ft 196.4 billion in repayments and the aforementioned weakening of the forint. Forex bonds accounted for 24.9% of total state debt.
Bonds were issued three times in the first half of the year. In the middle of January bonds worth €1 billion were issued, equivalent to Ft 250.4 billion. In March bonds worth JPY 50 billion, or the equivalent of Ft 93.8 billion, were issued. Also in March, bonds worth ₤500 million, or the equivalent of Ft 192.9 billion, were issued. Bonds worth $750 million issued in 1999 matured in April, resulting in Ft 186.7 billion. The total stock of forex bonds was worth Ft 3,590.9 billion in forint terms at the end of June, including losses of Ft 396.5 billion due to exchange rate changes.
Direct forex loans from foreign and domestic sources accounted for 5.5% of state debt at the end of June. The stock of these loans increased Ft 173.4 billion during first half year to 798.0, as the result of Ft 102.4 billion in new loans, Ft 9.6 billion in repayments and Ft 80.6 billion in exchange rate losses. Forex denominated budget debt owed to the National Bank of Hungary (MNB) accounted for 0.7% of state debt at the end of June. The stock of these issues, including the cost of hedging deals, came to Ft 107.2 billion at the end of June. The stock increased Ft 11.1 billion because of the weakening of the forint during the period.
Forint denominated budget debt rose Ft 780 billion to Ft 9,933.4 billion in the six months to the end of June. Within this, the stock of forint loans remained unchanged at Ft 800 million. Forint-denominated securities accounted for 68.8% of state debt. The stock of these securities rose Ft 780 billion to Ft 9,932.6 billion in the first six months of the year, as the result of Ft 899.1 billion in issues and Ft 119.2 billion in maturing securities. Foreign investors held Ft 2,724.5 billion of forint bonds and T-bills, Ft 186.1 billion more than at the end of last year, including a monthly Ft 15.1 billion fall in June. The value of outstanding bonds rose Ft 320.1 billion in the six months to the end of June, while the value of T-bills rose Ft 547.7 billion and the value of retail government securities rose Ft 31.3 billion.