Hungary incurs massive current account deficit in August too
The surplus on the capital account fell by €96 million from €337 million in July to €241 million in August, of which €83 million was due to a decline in EU capital transfers, bringing the monthly total to €218 million. The financing needs, calculated from the combined current and capital account balances, an accepted indicator to characterise the country's overall external financial position, increased by €115 million compared to the previous month to €1.452 billion.
The current account deficit linked to the real economy grew by €262 million compared with July to €1.169 billion, of which the balance of goods deficit rose by €272 million to €1.762 billion, while the surplus on trade in services increased by €10 million to €593 million.
Withdrawals of primary income diminished by €236 million compared to July to €399 million, with a net surplus of €137 million in repatriated earnings, up by just under €13 million. The amount repatriated from investment income fell by €226 million to €587 million. Foreign investors repatriated €38 million less of the profits from working capital investments, €487 million, while only €67 million was withdrawn from their portfolio investments, €266 million less than in July.
The high deficit in August is not surprising, as it is mainly caused by the horrific energy import figures, the impact of which we have already seen in the foreign trade balance in August. Monthly current account data are also subject to a lot of changes, with significant adjustment made after later data revisions. That said, the basic expectation is that the C/A gap in the third quarter will be very high, reaching 8-10% of GDP.
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