Net Issuance Plan Raised: Bigger Budget Gap, EU Pre-Financing

Hungary’s Government Debt Management Agency (ÁKK) has raised its net issuance plan for 2026 from HUF 5,445 billion to HUF 8,717 billion because of a bigger than expected budget deficit and pre-financing for European Union funding that will not arrive from Brussels until December, ÁKK CEO Gergely Tardos told journalists on Monday.

ÁKK has raised its plan for net forint issuance from HUF 2,903 billion to HUF 5,397 billion and the plan for net FX issuance from HUF 2,541 billion to HUF 3,320 billion, the CEO said.

In spite of the unfavorable external environment, demand for Hungarian government securities was strong on the institutional markets for forint and FX papers, as well as the retail market, he added.

ÁKK's plan for net issuance of forint bonds was raised from HUF 1,723 billion to HUF 3,381 billion, the agency said in a statement.

The plan for net retail issuance was lowered from HUF 1,000 billion to HUF 798 billion. ÁKK noted that the original target had been met already by the start of July, and it was buying back retail securities issued earlier from distributors' own accounts to decrease debt service costs. In July-September, ÁKK bought back some HUF 400 billion of retail securities with yields of at least 6%, it added.

The plan for net issuance of FX bonds was raised from HUF 1,482 billion to HUF 2,253 billion. ÁKK noted that it had already overshot the earlier plan and plans no additional FX bond issuance for the rest of the year. ÁKK said pre-financing for Hungary's Recovery and Resilience Facility (RRF) programs amounted to HUF 2,187 billion in August. RRF funding of up to EUR 10 billion – minus pre-financing transferred in 2023 – is expected to arrive in December, it added.