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Higher MNB figure on 2009 general government financing requirement reflects MNB loss

The bulk or 0.5 percentage points of the 0.6 percentage-point difference between figures published on Hungary's 2009 net general government borrowing published by the Central Statistical Office (KSH) and on the government financing requirement published by the National Bank of Hungary (MNB) reflects the loss posted by the MNB last year, Econews calculated based on the different methodology of the two statistics.

Hungary had a net general government financing requirement of HUF 1,197 billion, or 4.6% of GDP, last year, the National Bank of Hungary (MNB) reported based on financial account data on Thursday. The figures are HUF 141 billion, or 0.6%-points of GDP, higher than the 2009 HUF 1,056 billion, or 4.0%-of-GDP net borrowing requirement in Hungary's EDP (excessive deficit procedure) report published by the Central Statistical Office (KSH) on Thursday. The ESA95 deficit, varying from the EDP figure in the accounting of swap transaction, was HUF 1,035 billion, also 4.0% of GDP last year, KSH said.

Aside from statistical error, the difference between the MNB figures, calculated from financial accounts and KSH figures, based on national accounts data is of a methodological nature, the MNB communications department told Econews. The MNB statistics account the central bank's eventual profit or loss as re-invested profit or loss of the general government. No such correction is made in national accounts statistics or the EDP report in absence of related international statistical requirements, the MNB said.

The central bank registered losses of HUF 119 billion last year, the MNB financial accounts show. The losses are around 0.46% of 2009 GDP, Econews calculated.

The central bank is making a loss on its net foreign assets if the forint strengthens. Under the law the government has to offset the MNB's eventual losses through a central budget transfer after the MNB's annual report on the given year was approved the following spring.

The final MNB figure on 2009 net general government financing requirement was revised slightly upward from a preliminary HUF 1,156 billion, or 4.4% of GDP, reported on February 16.

The Q4 net general government borrowing requirement was HUF 321 billion, or 4.5% of quarterly GDP, the MNB reported, revising the figures up from a preliminary HUF 256 billion, or 3.6%.

The Q4 ratio was up from 4.0% in the previous quarter, but fell, in fact, sharply if adjusted for seasonal factors. The seasonally-adjusted net borrowing requirement fell to 1.5% of GDP from 5.2% in Q3, and has actually been dropping each quarter since Q4 2008, when it peaked at 6.4% of GDP, the highest ratio since the end of 2006.

The final figure for gross consolidated debt of Hungary's general government, calculated according to the Maastricht criteria, came to HUF 20,421 billion, or at 78.3% of GDP at the end of 2009. The figure was revised up by a slight HUF 25 billion, while the ratio was unchanged from preliminary data.

The nominal debt and ratios include the called but unused part of Hungary's autumn 2008 international loan-package with the IMF-EU-World Bank. The already called but unused part of the loan package was around €3 billion at the end of 2009. (MTI – Econews)