24 April 2025
The external balance indicators of the Hungarian economy continued to improve in 2024. The current account surplus increased to 2.2 percent of GDP. With strong net lending position and continuing net FDI inflows, the economy’s external debt ratios declined somewhat and remain low. At the end of 2024, international reserves stood well above the level of short-term external debt.
In the course of 2024, with declining energy and income balance deficits, Hungary’s external position continued to improve. As a result, the current account balance as a share of GDP rose further, reaching a surplus of 2.2 percent in 2024, which was above the levels of other countries in the region. Taking into account the capital account surplus as well, the economy’s net lending position also increased and reached 2.6 percent of GDP.
The improvement in the external position was mainly due to a decline in the fiscal deficit: the general government primary balance got close to equilibrium for the first time since 2019. In contrast, the private sector’s net lending position declined. On the one hand, high household financial savings decreased somewhat at the end of the year, reflecting a pick-up in consumption, and on the other hand, lower profitability of the corporate sector led to a moderate increase in its net borrowing.
Along with the economy’s positive net lending position, net FDI inflows continued, albeit to a lesser extent, in 2024. As a result, net external debt as a share of GDP fell to close to 10 percent by the end of 2024, remaining at historically low levels. The stock of international reserves stood at EUR 44.6 billion at the end of 2024, which was significantly, by nearly EUR 10 billion, above the level of short-term external debt, which is a key focus of investors.