Bloomberg News

Hungary May Only Sell Forint Bonds Next Year, Minister Says

December 15, 2012

Hungary may finance itself with local-currency debt in 2013 and issue no foreign-currency bonds for a second year, Economy Minister Gyorgy Matolcsy said in a radio interview.

Hungary, which last issued so-called Eurobonds in May 2011, has the biggest debt burden in the east of the European Union. Public debt will fall to 73 percent of gross domestic product by the end of 2013 from a projected 77 percent at the end of this year, Matolcsy said in an interview with state-run MR1-Kossuth radio today.

Hungary scrapped plans to issue foreign-currency bonds this year because the forint and the country’s bonds were among the best performers in the EU so the government preferred to raise more funds domestically, Matolcsy said.

“I am not certain that we need to issue foreign-currency denominated bonds on the international markets next year,” Matolcsy told MR1-Kossuth. “We can finance ourselves on the forint market.”

Hungary is still looking for a “safety net” from the International Monetary Fund as protection against a deterioration in the euro-area economy, Matolcsy said. At the same time, Hungary wants to keep room for its “creative” economic policies, so the country shouldn’t join the common currency bloc until its economy becomes more developed, Matolcsy added.

Hungary’s “growth and investment turnaround” in 2013 after this year’s recession will mean that any modifications of next year’s budget will be on the positive side, Matolcsy said.

To contact the reporter on this story: Andras Gergely in Budapest at agergely@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net


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