Net EU transfers to Hungary reach all-time high in 2011
Net transfers from the European Union to Hungary reached €1.7bn, a quarterly peak, in the fourth quarter of last year and pushed annual net EU transfers to an all-time high of €4.37bn in 2011, cash flow-based figures in the fresh quarterly report of the National Bank of Hungary (MNB) show.
The full-year net transfers well surpassed the previous peak of €2.73bn posted in 2009, in the aftermath of the financial crisis. In the preceding three years they varied between €1bn and €1.3bn.
Net EU transfers to Hungary dropped only slightly to €2.615bn in 2010 before rising steeply - by two-thirds - in 2011, the cash-flow figures show.
The annual net EU transfers boosted the central bank’s international reserves by 10.8% in 2009, by 9.4% in 2010 and by 13.1% in Q1-Q3 2011, Econews calculated based on the cashflow figures.
Accrual-based figures in balance of payment statistics, which book EU transfers when they are used, reveal that, except for a decline in 2007, net EU transfers have risen since May 2004, when Hungary joined the EU.
On an accrual basis, the net transfers were just below €200m in the fragment year of 2004, and reached €3.148bn in Q1-Q3 2011, close to the €3.317bn figure for the full year of 2010. (The MNB will publish balance of payments statistics for Q4 on March 30.)
The net EU transfers reduced Hungary’s external borrowing requirement between 2004 and 2008 and helped to give it a net external financing capacity since 2009 when the recession turned the trade deficit into a surplus and reduced the profit and dividend transfers of foreign-owned companies.
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