Hungary’s gross general government debt declined more than expected and was 70.9% of gross domestic product at the end of 2018, preliminary financial accounts data published by the central bank (MNB) showed on Monday. General government net lending came to -2.2% of GDP last year, while the financing capacity of households was 5.9% of GDP.
General government gross debt at nominal value (or Maastricht debt) dropped 1.7 percentage points quarter on quarter to 70.9% in October-December last year. The debt decreased by 2.4 ppts in annual terms, to its lowest level since 2007.
Note that the preliminary data are based on <>estimated GDP for 2018, and the revised figure could show an even lower debt ratio. Meanwhile, net liabilities of general government amounted to 57.5% of GDP at the end of 2018, down from 62.7% a year earlier.
Considering that Finance Minister Mihály Varga projected last December that Hungary’s debt-to-GDP ratio could be under 72% by the end of 2018, the MNB’s figure is a pleasant surprise, even though at HUF 29,032 billion the debt is HUF 1,600 bn larger than in 2017.
The MNB said general government net lending was equal to -2.2% of GDP and net lending of households was equivalent to 5.9% of GDP in 2018. In the fourth quarter alone, general government net lending calculated from the financing side (HUF -823 billion) was equal to -7.0% of quarterly GDP.
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