Bloomberg News

Hungary Debt Level Rises to 83% of GDP in 3rd Quarter on Forint

January 02, 2012

Jan. 2 (Bloomberg) -- Hungary’s public debt level rose to 82.6 percent of gross domestic product at the end of the third quarter, the central bank said today.

The nominally calculated gross, consolidated debt level rose from 76.8 percent of GDP in the second quarter, the Magyar Nemzeti Bank said on its website today.

Prime Minister Viktor Orban effectively nationalized $13 billion of private pension funds to reduce the eastern European Union’s highest debt level. The policy, part of the government’s “unorthodox” measures, hurt investor confidence and weakened the forint, raising the debt level, half of which was denominated in foreign currencies.

The forint dropped 16 percent against the euro in the second half of 2011, the worst performance among more than 170 currencies tracked by Bloomberg. It traded at 314.07 at 4:31 p.m. in Budapest.

The central bank is “trying to compare apples and pears since gross domestic product is measured in forint while a significant portion of the debt is in foreign currencies,” said Gabriella Selmeczi, a spokeswoman of Orban’s Fidesz party, according to MTI state news service. She said previous Socialist governments were to blame for the foreign currency debt.

--Editors: Jeffrey Donovan,

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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