Strickest budget in seven years

The National Bank of Hungary's (MNB) preliminary financial accounts data, published on Monday, also showed that it happened again in Q2 for the first time in nearly five years that households exceeded their spending limitations and became net borrowers.
Preliminary financial accounts data of the MNB show that general government net borrowing totaled 3.7% of GDP (Ft980bn or $6.6bn) in the year to end-June, which compares with 3.9% at end-Q1 (the figure known up till now was 4.0%). This implies that chances for Hungary to meet or even undershoot its 3.8% of GDP budget deficit target have grown, but the Finance Ministry remains cautious and would not lower the goal.
In Q2, the central government financed its borrowing requirement mainly by issuing long-term debt securities. It repaid large amounts of its debt in the period. There continued to be a significant increase in the sub-sector's deposits held with the central bank. Local government authorities financed their financial deficit mainly by reducing their deposits with credit institutions. Sales of unquoted shares by the sub-sector were strong. On the liabilities side, debt issuance and repayments of existing loans were significant. The financial surplus of social security funds reflected an increase in deposits and a fall in other liabilities, according to financial accounts data.
At the end of June, general government gross consolidated debt at nominal value (or Maastricht debt) was Ft17bn ($105m), equivalent to 64.8% of GDP.

Source: Portfolio.hu Online Financial Journal

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