AKK head: State debt to fall to 74 pc of GDP in 2016

Budapest, December 27 (MTI) – State debt in proportion to gross domestic product (GDP) can be scaled back to 74 percent in 2016, the chief executive of the state debt management centre AKK told daily Világgazdaság on Tuesday.

“There will be no tricks, just as there were none last year, and we will manage to reduce debt,” György Barcza told the paper.

The EU’s expected debt level of 60 percent can be reached in 10-15 years, but if economic growth accelerates, this period can be reduced to just six or seven years, he added.

To ease the burden on the market of forint bonds, Barcza said, next year Chinese yuan or Japanese yen-based forex bond issues will be considered.

On the subject of Hungary’s residency bonds, Barcza said that the issuance of euro bonds is now more favourable with Hungary receiving credit upgrades, and hence the residency bond programme should be revisited.

Plans for introducing new types of state instruments are also on the table, he said, adding as an example that in the UK there are stamp bonds and in Sweden lottery bonds. “Only something that can survive in the long run will be considered,” he said.

Source: MTI