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Mar 10, 2016

Hungary’s economy continues to surprise

This week, investors interested in a stable, growing, Hungarian economy received some upbeat news.

Beating expectations and even the preliminary estimates, Hungary’s debt-to GDP ratio fell to 75.3 percent at the end of 2015, the Ministry of National Economy reported on Tuesday. A shrinking debt, together with a solid 2.9 percent GDP growth in 2015 resulted in part from an exemplary fourth quarter.

Further proof of the stabilizing economy came in February’s record-breaking budget surplus, the best budget balance number ever recorded for this time of year, a 14.8 billion HUF surplus.

February was also a significant month for the debt structure. As a result of the increasing domestic demand for state bonds, February was the first month to see the value of state bonds owned domestically (3.97 trillion HUF) exceed the value of state bonds owned by foreign investors (3.68 trillion). This record shows a debt structure less exposed to external factors.

Hungary, after barely avoiding a Greece-like crisis in 2008-2009, has been on a steady path of stabilization and growth since 2010. For 2016, the Ministry of National Economy forecasts further progress on these fronts, both shrinking debt and continued growth.