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Tuesday, October 02, 2007

Hungary Q2 2007 Current Account Deficit

According to data from Magyar Nemzeti Bank last week Hungary's current-account deficit widened in the second quarter of 2007, from the previous Q1 as rising interest payments led to a higher income gap.

The shortfall in the second quarter 1.7 billion euros, compared with a restated 1.2 billion euros in the first quarter, the Budapest-based central bank said today. The deficit compares with 1.6 billion euros in the year-ago period.

Hungary has the European Union's highest benchmark interest rate after government measures to reduce the EU's widest budget deficit almost quadrupled the inflation rate in the year to March.

These figures mark a halt in the reduction which had been taking place in the deficit over the last three consecutive quarters. An improving goods trade balance which has been led by rising exports was behind the improvement.

Hungary's CA shortfall was 2.9 billion euros in the first six months of the year, compared with 3.2 billion euros in the same period last year. The income deficit in the second quarter widened to 2.3 billion euros from 1.9 billion euros in the first quarter. The surplus on goods traded was 200 million euros after a 393 million-euro shortfall in the first half of last year.

Hungary's net external debt rose 3.8 billion euros from Q1 in the second quarter, to 37.1 billion euros.

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