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Hungary’s Q3 Debt Reaches 74.3% of GDP

Deposits with the central bank and credit institutions had a significant rise.Deposits with the central bank and credit institutions had a significant rise.

Hungaryʼs state debt, calculated according to Maastricht rules, stood at 74.3% of GDP at the end of September, down from 75% of GDP at the end of June, the National Bank of Hungary announced concerning Hungaryʼs financial accounts.

In nominal terms, state debt reached HUF 25.883 trillion ($87.6 billion) in Q3. It was slightly down from HUF 25.908 trillion at the end of Q2 2016. Net borrowing increased the nominal figure by HUF 153 billion, but revaluations decreased it by HUF 178 billion in the third quarter, BBJ reported.

Net liabilities of the general government amounted to HUF 22.578 trillion or 64.9% of GDP at the end of the third quarter.

The net financing requirement of the general government, which is a good approximation of the general government deficit, was negative, meaning the government was a net lender. Net lending came to HUF 18 billion or 0.1% of GDP in the four quarters to the end of Q3. Net financing requirement for four quarters was at HUF 389 billion at the end of Q2.

In Q3 alone general government net lending, calculated from the financing side, was HUF 356 billion or 3.9% of quarterly GDP. In Q2 net financing requirement was HUF 49 billion or 0.6% of GDP.

In Q3, net lending of central government amounted to HUF 319 billion. On the assets side of the sub-sectorʼs balance sheet, there was a notable increase in deposits placed with the central bank and credit institutions. Shares held by the central government sub-sector also rose due to transactions. Financial derivatives and receivables from the EU declined sharply.

On the liabilities side, there was a much smaller increase in respect of treasury bills than in the previous quarter, as purchases by the household sector rose much less strongly, and treasury bills held by the financial corporate sector fell significantly. Holdings of government bonds rose significantly, reflecting massive net sales and credit institutions purchases.

Net lending of local governments was HUF 72 billion in 2016 Q3. Within the sub-sectorʼs financial assets, local government deposits placed with credit institutions rose significantly. Within liabilities of local governments, other accounts payable to the corporate sector increased.

Net borrowing of the social security funds was HUF 35 billion in 2016 Q3. On the assets side, deposits held with central government and receivables from households fell. On the liabilities side, the stock of short-term loans granted by central government increased.

 

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