Economy: Budget Deficit Stands at 2% of GDP in 2017; Public Debt at 73% of GDP at end-2017; PMI Slips to 57 in March
Hungary’s budget posted a deficit of 746.3 billion forints in 2017, equivalent to 2 percent of GDP, the Central Statistical Office (KSH) said on Wednesday.
The 2017 deficit rose by 156.9 billion forints, or by 0.3 percentage points of GDP, from 2016. Government sector revenue increased by 7 percent and expenditure rose by 7.7 percent from 2016. Commenting on the figures, Economy Minister Mihaly Varga told public news channel M1 that the data of the first three months suggested that this year’s deficit target of 2.4 percent of GDP could be maintained and the public debt would continue to fall.
Hungary’s public debt, including the liabilities of state-owned Eximbank, stood at 73.6 percent of GDP at the end of 2017, down from 76 percent at the end of 2016. Excluding Eximbank, the debt was 71.7 percent of GDP, down from 73.9 percent a year earlier, according to the KSH’s latest data. The government insists Eximbank’s liabilities are not part of the public debt, Varga said.
Public Debt 73.6% of GDP at end-2017
Hungary’s gross consolidated public debt, calculated according to Maastricht rules and including the liabilities of state-owned Magyar Eximbank, stood at 73.6% of GDP at the end of 2017, down from 76% at the end of 2016, preliminary data released by the National Bank of Hungary (NBH) show. Excluding Magyar Eximbank, the debt was 71.7% of GDP, down from 73.9% a year earlier.
The NBH recently started publishing separate public debt ratios, with and without the balance sheet of Magyar Eximbank, in line with a decision by Eurostat. Eurostat has for years maintained that Magyar Eximbank should be reclassified inside the state budget, which would raise the public debt. The net budget financing requirement, which is a good approximation of the budget deficit, was 721 billion forints (EUR 2.3bn) in 2017, equivalent to 1.9% of GDP, the NBH data show. The net financing requirement rose from 1.7% of GDP in 2016.
PMI edges down to 57 in March
Hungary’s seasonally-adjusted Purchasing Managers Index (PMI) slipped to 57 points in March from 57.2 in February, the Hungarian Association of Logistics, Purchasing and Inventory Management (Halpim), which compiles the index, said. An index value above 50 shows expansion in the manufacturing sector, while a value under 50 signals contraction.
Among the sub-indices that comprise the PMI, the new orders index fell slightly but remained over the 50 threshold. The production volume index was lower but continued to show expansion. The employment index also continued to show growth and increased from February. Delivery times were longer in March. Purchased inventories climbed for the 15th month in a row.