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Hungary has prelim €456 mln c/a surplus, €655 mln financing capacity in Q4

Hungary posted a current account surplus of €456 million in Q4 2009, resulting in a full-year preliminary surplus of €186 million. The country had a foreign financing capacity -- a positive combined balance of the current account and the capital account -- of €655 million in Q4 and €1.447 billion in 2009, the National Bank of Hungary (MNB) said in its preliminary current account report.

The seasonally adjusted financing requirement was €844 million or 3.6% of GDP in the fourth quarter of 2009, a 9 percentage-point improvement from the a year earlier and 0.3 %-point more than in the previous quarter, the MNB said.

Hungary's current account and external financing capacity turned into a surplus -- the first such surpluses posted since 1995 -- in Q2 2009 as the crisis resulted in a widening surplus on trade and services, profits of foreign-owned companies shrank and net transfers from the EU increased.

Surplus on trade of goods and services exceeded the deficit on income flows again, although both surpluses fell from Q3 and both exports and imports of goods rose on the quarter in the past three quarters - indicating recovery.

Growing net transfers from the EU significantly contributed to financing capacity. Transfers from the European Union totaled net €1.1 billion in Q4 and net €2.782 billion in 2009, sharply up from €664 million and €1.156 billion, respectively, in 2008, the MNB figures reveal.

After a €5467 million outflow in the second quarter, Hungary received non-debt generating inflow now for the second quarter. The inflow totaled €1.485 billion in Q4, resulting in a full-year non-debt generating inflow of just less than €2 billion after an outflow of €225 million in Q4 2008 and an inflow of just €27 million in the full of 2008.

Two-thirds of the Q4 inflow reflected (estimated) re-invested profits. Outflow on portfolio investments dropped to €144 million in Q4.

The unadjusted Q4 c/a surplus rose from €356 million in Q3 and was a sharp turnaround compared to a €2.384 billion c/a deficit in Q4 2008.

The unadjusted external financing capacity was slightly down from €702 million in Q3 and compares to an external financing requirement of €1.652 billion in Q4 2008.

In 2008, Hungary had a 7.504 billion c/a deficit and external financing requirement of €6.471 billion, both revised slightly down from earlier estimates. (MTI – Econews)