Hungary's State Debt Grows Further

Including the debt of the country's Eximbank, the Hungary's state debt amounted to 77.5% of GDP (HUF 46,264 billion). According to preliminary financial accounts data, net lending of households was equivalent to 5.2% of GDP in 2022 Q2 (HUF 3,102 billion), the National Bank of Hungary (MNB) reports.

As preliminary financial accounts data suggest, general government net lending was equal to -5.4% (HUF -3,216 billion) of Hungary’s GDP in the four quarters to 2022 Q2. General government consolidated gross debt at nominal value was 75.3% of GDP (HUF 44,949 billion) at the end of 2022 Q2.

General government
General government net lending amounted to HUF -333 billion or -2.1% of quarterly GDP in 2022 Q2. Of the sub-sectors of general government, net lending of central government, local governments and the social security funds was HUF -343 billion, HUF 19 billion and HUF -9 billion, respectively. At the end of 2022 Q2, the non-consolidated stocks of general government’s assets and liabilities amounted to 39.2% and 84.0%, respectively, of GDP. As a result, the sector’s net financial worth amounted to -44.9% of GDP.

Within financial assets of the general government, deposits placed with the central bank significantly increased due to transactions. There was a smaller rise in shares, other equity and claims related to EU funds due to transactions. However, the stocks of financial derivatives and tax receivables fell due to transactions.

Within liabilities of the general government, the stock of long-term securities rose significantly due to transactions in 2022 Q2 primarily as a result of non-residents’ financial investments. However, loan liabilities of the central government fell due to transactions, which primarily affected loans from financial corporations. Within other liabilities, a rise in the liabilities related to EU funds was decisive.

Households
Net lending of households was equivalent to 7.0% (HUF 1128 billion) of quarterly GDP in 2022 Q2. At the end of 2022 Q2, the non-consolidated stock of households’ financial assets and liabilities amounted to 131.4% and 22.7%, respectively, of GDP. As a result, the sector’s net financial worth amounted to 108.7% of GDP.

Within households’ financial assets, due to transactions, there was a significant increase in debt securities, loans, quoted shares, mutual fund shares, insurance technical reserves and other accounts receivable in 2022 Q2. By contrast, current account deposits fell markedly.

On the households’ liabilities side, the stock of long-term forint housing loans rose substantially within loans from credit institutions due to transactions. However, households’ other liabilities fell significantly.