Template-Type: ReDIF-Article 1.0

Author-Name: Gergely Kicsák
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: kicsakg@mnb.hu

Author-Name: Dávid Benkő
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: benkod@mnb.hu

Author-Name: Noémi Végh
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: veghn@mnb.hu


Title: Interest Savings of the Hungarian Budget between 2013 and 2019 in Comparison with Other EU Countries

Abstract: This paper compares the decline in government interest expenditure in Hungary
and other Member States of the European Union. Government interest expenditure
decreased across the whole EU between 2013 and 2019, and the second largest
drop was recorded in Hungary, with government interest payments diminishing from
4.5 per cent of GDP to 2.3 per cent. To understand the cause of this development,
favourable even by EU standards, the change in interest expenditure was divided
into three main factors: the yield and interest effect, the impact of the change in
the debt ratio and the influence of foreign currency debt. The analysis showed that
the decrease in Hungarian expenditures can be attributed mostly – by about 80 per
cent – to declining domestic yields, while the fall in the debt ratio had a somewhat
lesser effect – around 18 per cent. Had foreign currency debt levels been lower,
Hungary’s interest expenditure would have shrunk even more.

Classification-JEL: E42, H50, H62, H63
Keywords: general government, interest expenditure, monetary policy
Pages: 5-26
Volume: 19
Issue: 4
Year: 2020
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-19-4-st1-kicsak-benko-vegh.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:19:y:2020:i:4:p:5-26