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Gross general government debt grew in Q3 from Q2

Hungary's general government net borrowing, HUF 1,549 billion, amounted to 6.0% of GDP in the four quarters to 2009 Q3. In Q3, net borrowing, HUF 256 billion was equal to 3.9% of GDP, according to preliminary data published by the National Bank of Hungary (MNB) on Monday.

At the end of Q3, general government consolidated gross debt at nominal value - “Maastricht debt” - was HUF 20,421 billion, equivalent to 79.4% of GDP. At the end of Q3, general government net debt, HUF 14,943 billion, amounted to 58.1% of GDP.

Consolidated gross general government debt was around 77% of GDP, or HUF 19,971 billion, at the end of the second quarter, falling from almost 83% of GDP at the end of Q1, but exceeded the 73% level at the end of last year.

In Q3, the central government financed its borrowing requirement, HUF 210 billion, mainly by long-term borrowing abroad and issuing long-term debt securities. Deposits with the central bank and lending to credit institutions increased significantly, while liabilities to credit institutions fell.

Local government net lending, HUF 59 billion, mainly reflected an increase in deposits with credit institutions.

The social security funds financed their borrowing requirement, HUF 106 billion, mainly by increasing their borrowing from the central government.

Household net lending, HUF 881 billion, was equivalent to 3.4% of GDP in the four quarters to 2009 Q3. In Q3, net lending, HUF 60 billion, amounted to 0.9% of GDP.

On the assets side, there were significant increases in households’ foreign currency deposits and pension fund reserves. By contrast, the sector’s holdings of cash, government securities and quoted shares fell sharply, due to transactions. On the liabilities side, forint loans increased, while foreign currency loans fell by slightly more than the increase in forint loans. The relatively small movements in the forint exchange rate did not have a significant impact on the values of financial assets and liabilities in Q3. (MTI-Econews)