The increase in net lending calculated in terms of the real economy stems from the rise in trade surplus and EU transfers. The increase observed in the surplus on the balance of goods and services was partly the result of declining energy imports and partly due to the very dynamic performance of the automotive industry. With regard to the latter, the depreciation of the euro against the US dollar may have also played a role, which may have been reflected in higher growth of the European economy, and ultimately in a stronger expansion in exports of Hungarian goods. As a result of mutually opposing processes, the income balance remained broadly unchanged. Whereas the interest balance continued its mild downward trend as a result of declining yields, the income of corporations expanded moderately, due to improving profit prospects. Due to the rising trend in the drawdown of EU transfers, the annual surplus on the balance of transfers reached another peak.
Financing side processes continue to show a considerable decline in net external debt, while in FDIs to Hungary in the first quarter exhibited a slightly smaller increase compared to foreign investments of residents. The decline of close to EUR 1.4 billion in net external debt was attributable to the consolidated general government, mainly owing to foreign exchange reserves increasing due to the inflow of EU transfers, while in the course of the quarter the state also repaid a significant amount of foreign exchange bonds. Funds were raised by banks, presumably as a correction of the considerable outflow of funds at the end of the year, while external assets also expanded.
Financing data indicate a decline in external debt, but the external debt ratios did not decrease, as a result of valuation changes due to USD appreciation and declining yields. Similarly to the previous quarter, Hungary's GDP-proportionate gross external debt amounted to 86 per cent of GDP, while its net external debt was 33 per cent of GDP. USD appreciation and falling market yields had a considerable impact on the development of external debt indicators. However, declining yields are favourable with regard to external sustainability. Short-term external debt based on residual maturity, which is of key importance for Hungary’s external vulnerability, showed a slightly increasing trend and rose above EUR 22 billion. In spite of this, the country's reserve adequacy improved, since the central bank's foreign exchange reserves increased to nearly EUR 37 billion by the end of the quarter, which significantly exceeds the level expected by investors.
Analysing the external balance with regard to the savings of individual sectors, it can be observed that the rise in net lending at the beginning of the year mainly occurred in the context of modest financing needs of the state. At the start of the year, the financing needs of the general government dropped to below 2 per cent of GDP, primarily due to the revenue-increasing impact of economic growth. The financial savings of the private sector was considerably restructured by the settlement of foreign currency loans: this temporarily increased households’ net savings, while at the same time decreasing the savings of banks. In the first quarter of 2015, households’ portfolio restructuring tapered off substantially, as reflected in the continued year-end expansion of bank deposits.