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Hungary's preliminary c/a deficit €1.468 bln in Q2

The figure is well below the €1.73 billion estimate of analysts in a poll by business daily Napi Gazdaság and the €1.72 billion estimate in a poll by Reuters. Along with the publication of preliminary Q2 figures, NBH revised current account data for 2004, 2005 and figures for the Q1 of 2006. Hungary's unrevised c/a deficit of €1.442 billion in Q1 2006 and €1.689 billion in Q2 2005 was modified to €1.537 billion and €1.499 billion, respectively. The H1 preliminary c/a deficit for 2006 was €3.006 billion, as against a revised €2.787 billion in the H1 of 2005. The preliminary NBH report shows non-debt-generating capital outflow was €2.223 billion in Q2 2006, well over the €1.448 billion in the same period last year. This resulted mainly from €1.607 billion withdrawals of retained earning accumulated in the preceding three quarters after Q2 2005, when profit repatriation came to €1.135 billion including €834 million from earnings retained earlier. At the same time, FDI inflow was just €267 million in April-June 2006, far less compared to €977 million in the Q1 or €355 million in Q2 last year. Withdrawals from portfolio investments amounted to €744 million, the highest figure ever recorded in Hungary.

H1 non-debt-generating capital outflow was €914 million as against 1.377 billion in H1 2005. The rise was the result of a big difference in Q1 figures: in Q1 2005 just €71 million of net capital came to Hungary in the form of non-debt-generating financing as opposed to €1.309 billion in Q1 2006. The trade deficit in the current account was just €66 million in Q2, according to the preliminary figures, far less compared to €289 million in Q1 2006 and €273 million in Q2 2005. The low deficit resulted from 10.7% higher import spending and a 12.6% rise in export revenue compared to the same period a year earlier. Trade in services showed a surplus of €337 million, well over the market forecast and considerably more than the €46 million in Q1 2006 and €223 million in Q2 2005. Within the services surplus, the tourism surplus rose to €408 million in Q2 2006 from €299 million in Q2 2005 due to a 23.8% decline in tourism spending, while income rose a slight 2.9% year-on-year. Income outflow rose to €1.722 billion in Q2 2006 from €1.499 billion in Q1 and €1.524 billion in Q2 2005. The H1 figure was €3.221 billion, up €449 million from the same period in 2005. Income outflow on debt-related investments was €421 million in Q2 2006, close to €442 million in Q1 and €414 million in Q2 2005. Profit repatriation on non-debt related investments was €1.331 billion in Q2 2006 as compared to €1.086 billion in Q1 and €1.135 billion in Q2 2005. (Mti-Eco)