Hungary’s public debt level rose to 82.6 percent of GDP at the end of the third quarter 2011, the Hungary’s central bank said today and a weaker Hungarian forint foreign exchange rate is not helping concerns over Hungary’s economy.
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.
Hungarian Forint Exchange Rate Decline
The Hungarian forint’s foreign exchange rate dropped 16 percent against the euro in the second half of 2011, the worst performance among more than 170 currencies. It traded at 314.07 at 4:31 p.m. in Budapest.
The Hungarian 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. S
She said previous Socialist governments were to blame for Hungary’s foreign currency debt.