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Financial Borrowing of Hungarians in 2021 Nears Historic High

Péter Cseresnyés 2022.01.10.

2021 is likely to become the strongest year in the history of Hungary’s retail credit market based on the official data of the first eleven months. The home loan market was booming, with consumer credit showing growth throughout 2021, but with an evident slowdown at the end of the year.

Hungary’s retail credit market may close the strongest year in its history based on data for January-November, economic news site Világgazdaság reports, citing figures from the National Bank of Hungary (MNB).

This is mainly due to housing loans, where the amount of new contracts increased by almost 40 percent between the beginning of January and the end of November 2021, reaching nearly 1.2 billion forints. The market for consumer loans also grew at a much more moderate but stable pace, with a volume of HUF 1.143 billion, up 6.7 percent year-on-year.

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In November, households signed almost 33 percent more housing loan contracts than a year earlier, amounting to HUF 111.4 billion, with the unusually strong demand at the end of the year, probably also helped by the Green Home program, available from October.

The situation is a bit more mixed when it comes to consumer credit; here some minor declines were seen in November.

The level of personal loans in November remained below the October level, but well above the level of a year earlier.

Demand for open-ended mortgages was also stable, with new contracts worth a total of HUF 9.3 billion in November, only slightly behind that of the previous month.

However, the government’s unsecured, interest-free, general-purpose prenatal baby support loan closed its weakest months since its introduction in 2019, with new contracts worth HUF 37.6 billion, well below the HUF 49.7 billion a year earlier, according to the paper.

Featured photo illustration via Pixabay