At the end of the third quarter Total government debt reached 80.5% of GDP – It appears from the primary financial accounts of the Central Bank. This is 3.1 percentage points higher than in the second quarter and 0.4 percentage points higher than at the end of 2020.
By the end of December, the debt ratio must be reduced to below 80.1% last year in order to comply with the rule in the Stability Act that states
The debt ratio can only rise if the economy slips into recession.
The central bank said nominal debt amounted to 42,106 billion HUF at the end of September. In the third quarter of 2021, net lending to the general government accounted for -4.2 percent of quarterly GDP (572 billion HUF). Among the sub-sectors of the general government, the net financing capacity of the central government is Ft-548 billion, local governments Ft51 billion, and social security funds Ft74 billion.
Among the general government liabilities, the government bond portfolio grew significantly during the quarter due to transactions, the main partner sector in the quarter was the rest of the world, while the net purchases of financial firms and households were lower than in previous quarters.
This means that a large part of the increase in debt in the third quarter was a result of the issuance of large foreign currency bonds in September.
Short-term securities continued to decline as a result of the transactions, with loans and borrowings largely unchanged, and other liabilities decreased slightly during the quarter.
According to preliminary data, net household lending in the year to the third quarter of 2021 amounted to 5.4 percent of GDP (HUF 2824 billion). In the third quarter of 2021, net household lending accounted for 2% of quarterly GDP (278 billion HUF). At the end of the third quarter of 2021, households’ unconsolidated financial assets accounted for 138.2 percent of GDP and their liabilities at 24.6 percent of GDP, raising their net financial assets to 113.6 percent of GDP.
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