Hungary has room for manoeuvre with EU recovery loan, says audit office head

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Hungary has room for manoeuvre when it comes to the drawdown of a 3,400 billion forint (EUR 9.4bn) loan it is entitled to from the European Union’s post-pandemic recovery package, László Domokos, the head of the State Audit Office, said on Friday, noting that the funds would be available until 2023.

In an interview to the website Novekedes.hu, Domokos said that given its external vulnerabilities and public debt level, Hungary should be careful when deciding whether or not it wants to take on more debt.

Making use of the full credit line would increase the public debt by some 7.5 percent, Domokos said, adding that this would be “a significant step back” in the progress Hungary has made in reducing the debt over the past years.

He noted that the EU had yet to finalise the member state obligations that would be tied to the so-called NextGenerationEU recovery fund.

Domokos added that the government was making the right decision by limiting its current recovery and resilience plan to the use of the 2,500 billion forint non-refundable grant.