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Hungary posts C/A surplus as recession bites

Hungary posted a surprisingly large second-quarter current account surplus as imploding domestic demand amid a deep recession helped unwind the country's external imbalances.

The current account posted a quarterly surplus of €476 million versus a deficit of €1.55 billion a year earlier and analysts' median forecast for a deficit of €580 million.

The figures were helped by an improvement in the trade and services balances, lower profit repatriations by investors and a central bank methodology shift which alone lifted the surplus by around €200 million, the central bank said. The central bank MNB said that it will likely improve its own current account forecasts after the data.

The data showed that Hungary's net external financing capacity also improved significantly, to an €891 million surplus, compared with a €261 million deficit in the first quarter and a €1.428 billion deficit a year earlier. (Reuters)