Economy
Hungary debt target attainable despite weak forint - ÁKK chief
Hungary has around HUF 730 billion forints billion) worth of buffers from debt issuance to finance a budget deficit which is widening due to a lag in payments of EU development funds, ÁKK Chief Executive György Barcza told Reuters on Monday.
He said the figure included 1 billion euros in proceeds from a euro bond issued last week. The ÁKK will decide only later this year on how to use this money.
A dispute between Hungary and the European Commission about some EU-funded projects may not be settled this year which could delay payments from the European Union, a Commission source said last month.
According Finance Ministry data, in the first eight months the cash-flow deficit widened to HUF 1.646 trillion, exceeding the full-year target of HUF 1.361 trillion in the 2018 budget largely due to a delay in payments from Brussels.
Barcza said the ÁKK was running about 200 billion forints above plan with forint-denominated government bond issues, and 200 billion ahead with issues of government securities to retail customers. This, together with the proceeds from the euro bond amounts to a total of 730 billion forints, he said.
He said the ÁKK was not planning to exceed its 20% target for the proportion of debt denominated in foreign currency within total debt. At the end of August it stood at 19.5%.
"Slowly but continuously, we can establish our presence there," Barcza said.
Front page photo by MTI / János Marjai
He said the figure included 1 billion euros in proceeds from a euro bond issued last week. The ÁKK will decide only later this year on how to use this money.
A dispute between Hungary and the European Commission about some EU-funded projects may not be settled this year which could delay payments from the European Union, a Commission source said last month.
According Finance Ministry data, in the first eight months the cash-flow deficit widened to HUF 1.646 trillion, exceeding the full-year target of HUF 1.361 trillion in the 2018 budget largely due to a delay in payments from Brussels.
Barcza said the ÁKK was running about 200 billion forints above plan with forint-denominated government bond issues, and 200 billion ahead with issues of government securities to retail customers. This, together with the proceeds from the euro bond amounts to a total of 730 billion forints, he said.
This (EU funds' lag) has been a recurring issue for years. The scale and amount changes, as there was a pre-financing gap last year and the year before, but this year it could be bigger
, Barcza said in an interview.He said the ÁKK was not planning to exceed its 20% target for the proportion of debt denominated in foreign currency within total debt. At the end of August it stood at 19.5%.
Barcza said the end-year public debt target of 73.2% of economic output was reachable even with the current weaker forint levels.
Barcza said Hungary can issue a further 2 billion renminbi worth of bonds in the Chinese market under a current programme that runs until the end of June 2019, and the ÁKK would like to use this possibility. Last year Hungary issued 1 billion renminbi worth of three-year "Panda" bonds."Slowly but continuously, we can establish our presence there," Barcza said.
Front page photo by MTI / János Marjai
