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Hungary general gov't net financing requirement 5.5pc of GDP in four quarters ending Q2

The net financing requirement of Hungary's general government totalled HUF 1,448 billion or 5.5% of GDP in the four quarters ending Q2 2010, the National Bank of Hungary (MNB) said on Friday, based on a review of national account statistics.

Transfers related to people returning from private pension funds to the state pension system reduced the financing requirement of the four quarters by HUF 97 billion or 0.4% of GDP, the bank said.

The four-quarter net financing requirement was up from 4.8% of GDP in both the four quarters ending Q1 2010 and for the full year of 2009. The figure was revised up from a preliminary HUF 1,282 billion or 4.8% of GDP, reported by the bank on August 16.

Hungary's gross consolidated general government debt at nominal value — government debt calculated according to the Maastricht criteria — stood at HUF 22,094 billion or 83.7% of GDP at the end of June 2010.

Maastricht debt rose HUF 1,673 billion from the end of 2009 when it stood at 78.4% of GDP.

n the second quarter of 2010 alone, the net financing requirement was HUF 530 billion or 7.9% of quarterly GDP, up from 5% ratio in Q1 and from 5.2% in Q2 2009. The figure was also revised up from a preliminary 6.1%.

The Q2 net general government financing requirement also rose on a seasonally-adjusted basis, reaching 6.4% of quarterly GDP, the highest ratio measured since Q1 2007, and up from an already high 5.9% in Q1 2010. Excluding seasonal factors, the quarterly net general government financing requirement peaked at 9.9% in Q1 2006, before the previous general elections, and bottomed out at 2.7% of GDP in Q1 2008 before rising again.

The net general government financing requirement is a good approximation of the ESA '95 general government deficit, published by the Central Statistics Office (KSH), except that the MNB statistics account the central bank's eventual profit or loss as re-invested profit or loss of the general government. The remaining gap between the accrual-based KSH deficit figure and that of the MNB reflects statistical error.

KSH reported a Q2 ESA deficit of HUF 413 billion or 6.2% of GDP on Friday. It also revised the 2009 general government deficit up to HUF 1,156 billion or 4.4% of GDP from a preliminary 4.0% of GDP. (MTI-Econews)