18-K/A

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 18-K/A

For Foreign Governments and Political Subdivisions Thereof

AMENDMENT NO. 1

TO

ANNUAL REPORT

OF

HUNGARY

(Name of Registrant)

Date of end of last fiscal year: December 31, 2021

SECURITIES REGISTERED*

(As of the close of the fiscal year)

Title of Issue	Amounts as to which registration is effective	Names of exchanges on which registered
N/A	N/A	N/A

Name and address of person authorized to receive notices

and communications from the Securities and Exchange Commission:

Economic Attaché of Hungary

227 East 52nd Street

New York, NY 10022

It is requested that copies of notices and communications from the Securities and Exchange Commission be sent to:

Eli Whitney Debevoise II, Esq.

Arnold & Porter Kaye Scholer LLP

601 Massachusetts Ave, NW

Washington, DC 20001-3743

Phone: (202) 942-5042

* The Registrant is filing this annual report on a voluntary basis.

HUNGARY

Reference is made to the registration statement filed with the Securities and Exchange Commission (the “Commission”) on September 17, 2013, as amended on November 6, 2013, and effective as of November 8, 2013 (Registration Number 333-191209) (the “Registration Statement”) of Hungary (the “Issuer” or “Hungary”).

The sole purpose of this Amendment No. 1 to the annual report of the Issuer on Form 18-K for the year ended December 31, 2021 is to file with the Commission: (i) a conformed copy of the Pricing Agreement, dated November 28, 2022, between the Issuer and J.P. Morgan SE, included as Exhibit 1.3 hereto; (ii) a form of the Issuer’s 7.625% Notes due 2041 (the “Notes”), included as Exhibit 4.1 hereto; (iii)  the legal opinions included as Exhibits 5.1 and 5.2 hereto in accordance with the Issuer’s undertaking in the Registration Statement to furnish copies of the opinions of the special Hungarian counsel for the Issuer and special New York counsel for the Issuer, respectively, as to the legality of each issue of securities under the Registration Statement; (iv) an itemized list of estimated expenses incurred or borne by or for the account of Hungary in connection with the offer and sale of the Notes, included as Exhibit 99.1 hereto; and (v) the recent developments in Hungary as of November 28, 2022, which are included as Exhibit 99.D.1. hereto.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Budapest, Hungary on the 1st day of December, 2022.

HUNGARY
	By:	/s/ Zoltán Kurali
	Name:	Zoltán Kurali
	Title:	Chief Executive Officer of the Government Debt Management Agency Private Company Limited by Shares as attorney in fact for the Minister of Finance acting for Hungary

EXHIBIT INDEX

Exhibit Number
*	1.1	Conformed copy of the Underwriting Agreement, dated September 17, 2013
*	1.2	Conformed copy of the Pricing Agreement, dated November 18, 2013, among Hungary, BNP Paribas, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Goldman Sachs International
	1.3	Conformed copy of the Pricing Agreement, dated November 28, 2022, between Hungary and J.P. Morgan SE
	4.1	Form of 7.625% Notes due 2041
	5.1	Opinion of Dr. Zsolt Szita Law Office, Hungarian legal advisers to the Government Debt Management Agency Private Company Limited by Shares of Hungary dated December 1, 2022
	5.2	Opinion of Arnold & Porter Kaye Scholer LLP dated December 1, 2022
*	24.1	Power of Attorney
	99.1	Itemized list of estimated expenses incurred or borne by or for the account of Hungary in connection with the sales of the 7.625% Notes due 2041
*	99.2	Conformed copy of the Fiscal Agency Agreement, dated September 17, 2013, between Hungary and Citibank, N.A., as fiscal agent, paying agent and registrar
*	99.D	Description of Hungary dated September 30, 2022
	99.D.1	Recent Developments in Hungary as of November 28, 2022

* Previously filed.

EX-1.3

Exhibit 1.3

PRICING AGREEMENT

To the Underwriter named in Schedule I hereto

November 28, 2022

Dear Ladies and Gentlemen:

Hungary proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated September 17, 2013 (the "Underwriting Agreement''), to issue and sell to the Underwriter named in Schedule I hereto (the "Underwriter'') the Securities specified in Schedule II hereto (the "Designated Securities''). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Preliminary Prospectus, Final Prospectus and Base Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Preliminary Prospectus, Final Prospectus and Base Prospectus (as therein defined), and also a representation and warranty as of the date of this Pricing Agreement in relation to the Preliminary Prospectus, Final Prospectus and Base Prospectus as amended or supplemented relating to the Designated Securities which are the subject of this Pricing Agreement. Each reference to the Underwriter herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. An amendment to the Registration Statement, or a supplement to the Preliminary Prospectus, Final Prospectus and Base Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission.

Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, Hungary agrees to issue and sell to the Underwriter, and the Underwriter agrees to purchase from Hungary at the offices of Clifford Chance US LLP on December 1, 2022, or such other time and place as shall be agreed upon by Hungary and the Underwriter (such time and date being the "Time of Delivery" for purposes of Clause 4 of the Underwriting Agreement), and at the purchase price to the Underwriter of 0.225% of the principal amount of the 7.625% Notes due 2041, the principal amount of Designated Securities set forth opposite the name of such Underwriter in Schedule I hereto.

The Underwriter hereby represents and warrants to, and agrees with Hungary to, the effect of the selling restrictions set forth under the section "Underwriting—Notice to Investors" of the Preliminary Prospectus and the Final Prospectus, each of which selling restrictions are incorporated herein by reference in their entirety.

Set forth in Schedule III hereto is a complete list of Issuer Free Writing Prospectuses used in connection with offers relating to the Designated Securities.

Set forth in Schedule IV hereto is a complete list of Supplemental Issuer Information.

Set forth in Schedule V hereto are the addresses of the Underwriter for notices pursuant to this Pricing Agreement and the Underwriting Agreement.

The term "Applicable Time," as used in the Underwriting Agreement, shall mean 2:30 p.m. New York City time on the date of this Pricing Agreement.

The provisions of the Underwriting Agreement incorporated herein by reference are hereby amended as follows:

1. Registration Statement File Number. The reference to file number "333- " in Section 2(a) of the Underwriting Agreement is hereby deleted in its entirety and replaced with a reference to file number "333-191209."

2. Minister of Finance. All references to "Dr. Mihály Varga, Minister of National Economy" shall be deleted in their entirety and replaced with "Dr. Mihály Varga, Minister of Finance."

3. Authorized Agent. All references to the "Office of the Trade Commissioner" shall be deleted in their entirety and replaced with "Economic Attaché of Hungary in New York."

4. Issuer's Counsel. All references to "Linklaters LLP" shall be deleted in their entirety and replaced with "Arnold & Porter LLP."

5. Money Laundering Laws. The following definition shall be incorporated following the definition of "Indebtedness" in the Introductory Section of the Underwriting Agreement:

""Money Laundering Laws" means all money laundering statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency.

6. Sanctions. Section 2(r) of the Underwriting Agreement is hereby deleted in its entirety and replaced with the following:

"(r) Sanctions, anti-corruption and anti-money laundering:

(i) None of Hungary, or to the knowledge of Hungary, any official representative, officer, agent, employee or affiliate (as defined in Rule 501(b) of Regulation D under the Act, as amended, ("Affiliate")) of Hungary (i) is currently a target of any financial or economic sanctions or trade embargoes administered or enforced by the Office of Foreign Assets Control of the US Department of Treasury (OFAC), the U.S. Departments of State or Commerce or any other US, EU, United Nations or UK economic sanctions ("Sanctions Target") and (ii) will not lend, invest, contribute or otherwise make available the proceeds of the offering of the Notes to or for the benefit of any then-current Sanctions Target, or to fund any activities in any country that is a Sanctions Target provided that the undertaking in (ii) is only sought and given to the extent that to do so does not result in any violation of the EU Blocking Regulation and Section 7 of the German Foreign Trade Ordinance (Verordnung zur Durchführung des Außenwirtschaftsgesetzes (Außenwirtschaftsverordnung – AWV));

(ii) Neither Hungary nor, to the best of the knowledge of Hungary, any official representative, officer, agent, employee, departments, ministries or agencies, Affiliate of or person acting on behalf of Hungary has engaged in any activity or conduct which would violate any applicable anti-bribery or anti-corruption law or regulation;

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(iii) Hungary has instituted, maintains and enforces policies and procedures designed to prevent bribery and corruption by the Government and persons associated with the Government;

(iv) To the best of Hungary's knowledge and belief, and except as disclosed in the section titled "Legal Proceedings" on page 15 of Exhibit D to the Issuer's annual report on Form 18-K filed with the Commission on 30 September 2022, as incorporated by reference in the Preliminary Prospectus Supplement and the Final Prospectus, no actions or investigations by any governmental or regulatory agency are ongoing or threatened against Hungary, its departments, ministries or agencies, or any of their ministers, directors, officers, employees or any associated person or party acting on their behalf in relation to a breach of the anti-bribery or anti-corruption laws;

(v) Neither Hungary, its departments, ministries or agencies nor, to the best of the Hungary’s knowledge, any minister, director, officer, employee, or anyone acting on behalf of Hungary or its departments, ministries or agencies has engaged in any activity which would breach Money Laundering Laws;

(vi) Hungary, its departments, ministries and agencies have instituted and will maintain and enforce policies and procedures designed to ensure compliance with all applicable Money Laundering Laws;

(vii) Hungary will not directly or indirectly use, lend or contribute the proceeds raised under the Agreement for any purpose that would breach the Money Laundering Laws; and

(viii) To the best of Hungary's knowledge and belief, no actions or investigations by any governmental or regulatory agency are ongoing or threatened against Hungary, its departments, ministries or agencies, or any of their ministers, directors, officers, employees or anyone acting on their behalf in relation to a breach of Money Laundering Laws."

If the foregoing is in accordance with your understanding, please sign and return to us, and upon acceptance hereof by you, on behalf of the Underwriter, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between the Underwriter and Hungary.

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Very truly yours,
HUNGARY
Represented by its Minister of Finance
By:	/s/ Zoltán Kurali
	Name: Zoltán Kurali
	Title: Chief Executive Officer, Government Debt Management Agency

Signature Page to Pricing Agreement

ACCEPTED AS OF THE DATE HEREOF:
J.P. MORGAN SE
By:	/s/ Natalia Lutova
	Name: Natalia Lutova
	Title: Managing Director
By:	/s/ Jiri Svarc
	Name: Jiri Svarc
	Title: Managing Director

Signature Page to Pricing Agreement

SCHEDULE I

Underwriter	Principal Amount of Designated Securities to be Purchased
J.P. Morgan SE	$400,000,000 7.625% Notes due 2041
Total	$400,000,000 7.625% Notes due 2041

Sch. I-1

SCHEDULE II

PRICING TERM SHEET

Hungary
U.S.$400,000,000 7.625% Notes due 2041

Pricing Term Sheet
dated November 28, 2022

Issuer	Hungary
Security	7.625% Notes due 2041 (Re-opening)
Currency	United States Dollar ("U.S.$")
Pricing Date	November 28, 2022
Outstanding Amount	U.S.$1,250,000,000 (Before re-opening)
Re-opening Amount Offered	U.S.$400,000,000
Maturity Date	March 29, 2041
Coupon	7.625%
Interest Payment Dates	Semi-annual on September 29 and March 29 in each year
Price to Public	106.50%1
Benchmark Treasury	T 4 11/15/42
Benchmark Treasury Price	100 – 07
Benchmark Treasury Yield	3.984%
Spread to Benchmark Treasury	300.5bps
Yield	6.989%
Net Proceeds to Issuer, before	U.S.$430,352,778
Expenses
Expected Settlement Date	December 1, 2022 (T+3)
Listing	London Stock Exchange

¹        Plus accrued and unpaid interest, from and including September 29, 2022 to, but excluding December 1, 2022, in the amount of U.S.$5,252,778.

Sch. II-1

Governing Law	New York, New York
Settlement	Depository Trust Company
Form of the Notes	Registered Global Notes
CUSIP	445545AF3
ISIN	US445545AF36
Common Code	061189734
Anticipated Ratings	[Intentionally omitted]
Lead Manager:	J.P. Morgan SE

Form The Notes will be book-entry securities in fully registered form, without coupons, registered in the name of Cede & Co., as nominee of DTC, in minimum denominations of U.S.$2,000 and integral multiples thereof.

Note: A securities rating is not a recommendation to buy, sell, or hold securities and may be subject to revision or withdrawal at any time.

A preliminary prospectus supplement of Hungary accompanies the free-writing prospectus and is available from the SEC's website at https://www.sec.gov/Archives/edgar/data/889414/000110465922122341/tm2231387-2_424b5.htm

The Issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Issuer has filed with the SEC for more complete information about the Issuer and this offering.

You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the Issuer, the underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling J.P. Morgan SE at +44 (0) 20 7134 2468.

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SCHEDULE III

ISSUER FREE WRITING PROSPECTUSES

The Free Writing Prospectus filed on November 29, 2022 under Registration No. 333-191209, which includes the Pricing Term Sheet for the 7.625% Notes due 2041.

Sch. III-1

SCHEDULE IV

SUPPLEMENTAL ISSUER INFORMATION

None.

Sch. IV-1

SCHEDULE V

ADDRESSES FOR NOTICES

J.P. Morgan SE
Taunustor 1 (TaunusTurm)

60310 Frankfurt am Main

Germany
Attention: Euro Medium Term Note Desk

Email: DCM_prgrammes@jpmorgan.com

Sch. V-1

EX-4.1

Exhibit 4.1

REGISTERED GLOBAL DEBT SECURITY

THIS DEBT SECURITY IS A GLOBAL DEBT SECURITY WITHIN THE MEANING OF THE FISCAL AGENCY AGREEMENT (AS DEFINED IN THE ATTACHED CONDITIONS) AND IS REGISTERED IN THE NAME OF CEDE & CO., AS THE NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"). THIS DEBT SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A DEBT SECURITY REGISTERED, AND NO TRANSFER OF THIS DEBT SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE CONDITIONS REFERRED TO WITHIN THIS DEBT SECURITY. THIS DEBT SECURITY REPRESENTS "SECURITIES OF A SERIES" WITHIN THE MEANING OF THE FISCAL AGENCY AGREEMENT.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO HUNGARY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

HUNGARY
7.625% NOTES DUE 2041

PAYABLE AS TO PRINCIPAL AND INTEREST IN LAWFUL MONEY OF
THE UNITED STATES OF AMERICA

FULLY REGISTERED NOTES

Certificate No. [•]

US$[•]

CUSIP No. 445545AF3

COMMON CODE No. 061189734

ISIN No. US445545AF36

REGISTERED HOLDER: Cede & Co., or its registered assigns

PRINCIPAL SUM OF [•] DOLLARS

HUNGARY, for value received, hereby promises to pay to the registered owner specified above or registered assigns on March 29, 2041, upon presentation and surrender of this Global Debt Security, the principal sum specified above in lawful money of the United States of America at the office of Citibank, N.A. in London or The City of New York, New York, and to pay interest thereon in like money in the manner provided in the Conditions endorsed hereon from December 1, 2022 or from the most recent interest payment date to which interest has been paid, or duly provided for, such interest to be payable semi-annually at the rate of 7.625% per annum on March 29 and on September 29 in each year (each an "Interest Payment Date") until the principal of this Global Debt Security shall have been paid, the first of such payments of interest to become due and payable on March 29, 2023. Notwithstanding anything to the contrary provided herein, any payment of principal or interest falling due on a day which is not a Business Day (as defined in the Fiscal Agency Agreement, dated as of January 29, 2010, between Hungary and Citibank, N.A., as Fiscal Agent and Paying Agent) will be payable on the next succeeding Business Day and no interest shall accrue for the intervening period, provided however that if that next succeeding Business Day falls in the next calendar month, such payment of principal or interest will be payable on the first preceding business day. The interest so payable on any such Interest Payment Date will be paid to the person in whose name this Global Debt Security is registered at the close of business on the fifteenth day (whether or not such day is a Business Day) preceding such Interest Payment Date (each a "Record Date").

This Global Debt Security is a direct, unconditional, unsecured and general obligation of Hungary. This Global Debt Security ranks and will rank at least equally in right of payment with all other unsecured and unsubordinated payment obligations of Hungary outstanding at the date of issue of this Global Debt Security or issued thereafter, except for such obligations as may be preferred by mandatory provisions of applicable law. This Global Debt Security will be backed by the full faith and credit of Hungary. Hungary will give no preference to one obligation over another on the basis of priority of issue date or currency of payment.

This Global Debt Security is not redeemable prior to maturity at the option of Hungary or of the registered holders thereof.

This Global Debt Security is subject to the Conditions endorsed on the reverse hereof and shall not be valid or enforceable for any purpose unless authenticated by the manual signature of the Fiscal Agent (as defined in the Fiscal Agency Agreement). This Global Debt Security shall be dated the date of its authentication by the Fiscal Agent.

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IN WITNESS WHEREOF, Hungary has caused this Global Debt Security to be duly executed by the facsimile signature of Mr. Zoltán Kurali and a facsimile of the written, printed or stamped name of Hungary to be hereon imprinted.

On behalf of Hungary
By:
	Name:
	Title:

Signature Page to Global Note

FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION

This is a permanent global debt security evidencing the Securities of a Series referred to in the aforementioned Fiscal Agency Agreement.

By:
	Name:	Citibank, N.A.
	Title:	Fiscal Agent

Dated: December 1, 2022

Signature Page to Certificate of Authentication

THE CONDITIONS WITHIN REFERRED TO

1. This Global Debt Security is one of the permanent global securities evidencing a duly authorized issue of US$400,000,000 aggregate principal amount of 7.625% Notes due March 29, 2041 of Hungary (herein called the "Debt Securities") as executed by the authorized signatory of Hungary. Mr. Zoltán Kurali (the "Hungary Authorized Signatory"). The Debt Securities are issued under the Fiscal Agency Agreement dated as of January 29, 2010 (as the same may be amended, supplemented or otherwise modified from time to time, the "Fiscal Agency Agreement") between Hungary, and Citibank, N.A., as fiscal agent and paying agent (the "Fiscal Agent", "Agent" or "Registrar"), to which Fiscal Agency Agreement reference is hereby made for a statement of the respective rights, duties, limitations of rights, obligations and immunities thereunder of Hungary, the Agent and the holders of the Debt Securities. Notices to the Fiscal Agent can be sent to Citibank, N.A., Attention: Citigroup Centre, 21st Floor, Canada Wharf, London E14 5LB. The Debt Securities are issuable as fully registered Debt Securities without coupons in minimum denominations of US$2,000 and integral multiples of US$2,000 in lawful money of the United States of America. This Debt Security is one of the series designated on the face hereof, initially limited to the aggregate price amount of US$1,650,000,000.

Hungary may from time to time, without the consent of the holders of the Debt Securities, create and issue further debt securities having the same terms and conditions as the Debt Securities even if further Debt Securities have original issue discount for U.S. federal income tax purposes and even if doing so may adversely affect the value of the original Debt Securities. Any additional Debt Securities, together with the Debt Securities, will constitute a single series of Debt Securities under the Fiscal Agency Agreement.

2. All payments made in respect of this Global Debt Security, including payments of principal and interest, to a holder that is not a resident of Hungary, shall be made by Hungary without withholding or deduction for or on account of any present or future taxes, duties, levies or other governmental charges of whatever nature, imposed or levied by Hungary or by any political subdivision or taxing authority within Hungary ("Taxes"). In the event Hungary is required by law to deduct or withhold any such Taxes from payments, Hungary will pay such additional amounts as may be necessary so that the net amount received is equal to the amount provided for in this Global Debt Security to be paid in the absence of such deduction or withholding. A holder will not be paid any additional amounts, however, if the Tax is:

(i) a Tax that would not have been imposed but for the holder's present or former connection (or a connection of the holder's fiduciary, shareholder or other related party) with Hungary, including the holder being or having been a citizen or resident of Hungary or being or having been engaged in a trade or business or present in Hungary or having, or having had, a permanent establishment in Hungary;

(ii) imposed on a payment to an individual and is required to be made pursuant to the European Council Directive 2003/48/EC on taxation of savings income in the form on interest payments or any other Directive implementing the conclusions of the EU Council of Finance Ministers meeting of November 26 and 27, 2000 or any law implementing or complying with, or introduced in order to conform to, such Directive;

(iii) imposed because the holder presents a Debt Security for payment more than thirty (30) days after the date on which the payment became due and payable;

(iv) an estate, inheritance, gift, sales, transfer or personal property tax, assessment or governmental charge;

(v) a tax assessment or other governmental charge which is payable other than by withholding;

(vi) a Tax that would not have been imposed but for the failure to comply with certification, information or other reporting requirements concerning the holder's nationality, residence or identity (or the nationality, residence or identity of the beneficial owner of this Global Debt Security), if such holder's compliance is required by the laws of Hungary or of any political subdivision or taxing authority of Hungary to avoid or reduce such tax;

(vii) required to be withheld by any paying agent from a payment on this Global Debt Security if such payment can be made without such withholding by another paying agent; or

(viii) are imposed as a result of any combination of the items listed above.

Furthermore, no additional amounts shall be paid with respect to any Debt Security to a holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent that the settler with respect to such fiduciary, partner or beneficial owner, as the case may be, would not have been entitled to payment of such additional amounts if they held this Global Debt Security themselves.

3. As long as any Debt Security remains outstanding, Hungary will not allow any Security Interest to be established on any of Hungary's or the National Bank of Hungary's assets or revenues, present or future, in order to secure (i) any Public External Indebtedness of Hungary having an original maturity of at least one year, or (ii) any Public External Indebtedness of the National Bank of Hungary having an original maturity of at least one year and incurred on or prior to December 31, 1998, unless the debt securities are secured equally and rateably to this external indebtedness.

For these purposes:

"External Indebtedness" means any obligation in respect of existing or future Indebtedness denominated or payable, or at the option of the holder thereof payable, in a currency other than the lawful currency of Hungary. If at any time the lawful currency of Hungary becomes the Euro, then External Indebtedness shall also include Indebtedness expressed in or payable or optionally payable in Euro, if (i) such Indebtedness was issued after the date on which the Euro became the lawful currency of Hungary, and (ii) more than 50% of the aggregate principal amount of such Indebtedness was initially placed outside of Hungary.

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"Public External Indebtedness" means External Indebtedness which: (i) is in the form of, or represented by, bonds, notes or other similar securities; and (ii) is, or may be, quoted, listed or ordinarily purchased and sold on any stock exchange, automated trading system or over-the counter or other securities market.

"Indebtedness" means any indebtedness of any Person (whether incurred as principal or surety) for money borrowed.

"Person" means any individual, company, corporation, firm, partnership, joint venture, association, organization, state or agency of a state or other entity, whether or not having separate legal personality.

"Security Interest" means any lien, pledge hypothecation, mortgage, security interest, charge or other encumbrance or arrangement which has a similar legal and economic effect, and, without limitation, anything analogous to any of the foregoing under the laws of any jurisdiction.

4. An "Event of Default" means any of the following:

(i) Hungary fails to pay the principal of or interest on any of the Debt Securities for more than 30 days after payment is due; or

(ii) Hungary does not perform any of its other covenants under any of the Debt Securities for more than 60 days after the holder of the Debt Security has given written notice of the breach to Hungary at the Fiscal Agent's corporate trust office.

An "Event of Acceleration" means any of the following:

(i) any action, condition or any other thing which at any time is required to be taken, fulfilled or done in order: (A) to enable Hungary lawfully to enter into, exercise its rights and perform and comply with its obligations under and in respect of the Debt Securities, (B) to ensure that those obligations are legal, valid, binding and enforceable and (C) subject to their official translation into the Hungarian language, to make the Debt Securities admissible in evidence in the courts of Hungary, is not taken, fulfilled or done within 30 days of receipt by Hungary of written notice thereof; or

(ii) it becomes illegal for Hungary to perform any of its obligations under the Debt Securities or if these obligations become invalid and not remedied by Hungary within 30 days' written notice thereof.

If an Event of Default or an Event of Acceleration occurs, all of the Debt Securities may, by written notice addressed and delivered by the holders of at least 25% of the aggregate principal amount of the outstanding Debt Securities to Hungary at the office of the Fiscal Agent, be declared to be immediately due and payable, unless prior to such date Hungary shall have remedied the Event of Default or Event of Acceleration for all the Debt Securities.

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If the Fiscal Agent receives notice in writing from holders of at least 50% in aggregate principal amount of the outstanding Debt Securities and/or a resolution is passed at a meeting of the holders of the Debt Securities, duly convened and held in accordance with the Fiscal Agency Agreement, to the effect that the Event(s) of Default and/or Event(s) of Acceleration giving rise to a declaration of acceleration made pursuant to the conditions above is or are cured or is or are waived by them following any such declaration and that such holders request the Fiscal Agent to rescind the relevant declaration, the Fiscal Agent shall, by notice in writing to Hungary and the holders, rescind the relevant declaration whereupon it shall be rescinded and shall have no further effect.

Hungary is not obliged to provide investors with periodic evidence that there are no Events of Default and/or Events of Acceleration. Please also note that the Fiscal Agency Agreement does not provide for the holders to be notified of the existence of an Event of Default or an Event of Acceleration or for any right to examine the Debt Securities register.

5. The Fiscal Agency Agreement contains provisions for convening meetings of holders of the Debt Securities to consider matters relating to the Debt Securities, including, without limitation, the modification of any provision of the terms of the Debt Securities. Any such modification may be made if, having been approved in writing by Hungary, it is sanctioned by an Extraordinary Resolution. Such a meeting may be convened by Hungary and shall be convened by the Fiscal Agent upon the request in writing of holders holding not less than 10% of the aggregate principal amount of the outstanding Debt Securities. The quorum at any meeting of holders convened to vote on an Extraordinary Resolution will be two or more persons holding or representing not less than 50% of the aggregate principal amount of the outstanding Debt Securities or, at any adjourned meeting of holders, two or more persons being or representing holders, whatever the aggregate principal amount of the outstanding Debt Securities held or represented; provided, however, that any proposals relating to a Reserved Matter may only be sanctioned by an Extraordinary Resolution passed at a meeting of holders at which two or more persons holding or representing not less than 75% of the aggregate principal amount of the outstanding Debt Securities or, at any adjourned meeting, 25% of the aggregate principal amount of the outstanding Debt Securities form a quorum. Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the holders of the Debt Securities, whether present or not.

If a resolution is brought in writing, such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more holders.

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For these purposes:

"Extraordinary Resolution" means:

(i) in relation to any Reserved Matter:

(x) a resolution passed at a meeting of holders duly convened and held in accordance with the Fiscal Agency Agreement by a majority consisting of not less than 75% of the aggregate principal amount of all outstanding Debt Securities; or

(y) a resolution in writing signed by or on behalf of holders of not less than 75% of the aggregate principal amount of all outstanding Debt Securities; and

(ii) in relation to any other matter:

(x) a resolution passed at a meeting of holders duly convened and held in accordance with the Fiscal Agency Agreement by a majority consisting of not less than 66.67% of the aggregate principal amount of the outstanding Debt Securities which are represented at that meeting; or

(y) a resolution in writing signed by or on behalf of holders of not less than 66.67% of the aggregate principal amount of all outstanding Debt Securities.

"Reserved Matter" means any proposal to:

(i) change any date, or the method for determining the date, fixed for payment of principal or interest in respect of the Debt Securities, to reduce the amount of principal or interest payable on any date in respect of the Debt Securities or to alter the method of calculating the amount of any payment in respect of the Debt Securities on redemption or maturity or the date for any such payment;

(ii) effect the exchange or substitution of the Debt Securities for, or the conversion of the Debt Securities into, shares, bonds or other obligations or securities of Hungary or any other person or body corporate formed or to be formed;

(iii) reduce or cancel the principal amount of the Debt Securities;

(iv) vary the currency or place of payment in which any payment in respect of the Debt Securities is to be made;

(v) amend the status of the Debt Securities;

(vi) amend the obligation of Hungary to pay additional amounts under Condition 2;

(vii) amend the Events of Default or the Events of Acceleration set out in Condition 4;

(viii) amend the law governing the Debt Securities, the courts to the jurisdiction to which Hungary has submitted in the Debt Securities, Hungary's obligation to maintain an agent for service of process in the United States or Hungary's waiver of immunity, in respect of actions or proceedings brought by any holder of the Debt Securities set out in Conditions 6 and 7;

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(ix) modify the provisions contained in Schedule I to the Fiscal Agency Agreement concerning the quorum required at any meeting of holders of the Debt Securities or any adjournment thereof or concerning the majority required to pass an Extraordinary Resolution or the percentage of votes required for the taking of any action;

(x) change the definition of "Extraordinary Resolution" or "outstanding" in these conditions of the Debt Securities and/or in the Fiscal Agency Agreement;

(xi) instruct any holder of the Debt Securities or committee appointed on behalf of all holders of the Debt Securities pursuant to the Fiscal Agency Agreement to withdraw, settle or compromise any proceeding or claim being asserted pursuant to Condition 4;

(xii) confer upon any committee appointed pursuant to the Fiscal Agency Agreement any powers or discretions which the holder of the Debt Securities could themselves exercise by Extraordinary Resolution; or

(xiii) amend this definition.

The holders of the Debt Securities may, by a resolution passed at a meeting of holders duly convened and held in accordance with the Fiscal Agency Agreement by a majority of at least 50% in aggregate principal amount of the Debt Securities then outstanding, or by notice in writing to the Fiscal Agent signed by or on behalf of the holders of at least 50% in aggregate principal amount of the Debt Securities then outstanding, appoint any persons as a committee to represent the interests of the holders if any of the following events shall have occurred:

(i) an Event of Default or an Event of Acceleration;

(ii) any event or circumstance which would, with the giving of notice, lapse of time, the issuing of a certificate and/or fulfillment of any other requirement provided for in Condition 4 become an Event of Default or an Event of Acceleration; or

(iii) any public announcement by Hungary, to the effect that Hungary is seeking or intends to seek a restructuring of the Debt Securities (whether by amendment, exchange offer or otherwise).

Such committee in its discretion may, among other things, (i) engage legal advisers and financial advisers to assist it in representing the interests of the holders of the Debt Securities, (ii) adopt such rules as it considers appropriate regarding its proceedings and (iii) enter into discussions with Hungary and/or other creditors of Hungary. Hungary shall pay any reasonably incurred fees and expenses of any such committee (including, without limitation, the fees and expenses of the committee's legal advisers and financial advisers, if any) within 30 days of the delivery to Hungary of a reasonably detailed invoice and supporting documentation.

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For the purposes of (i) ascertaining the right to attend and vote at any meeting of the holders of the Debt Securities and (ii) Conditions 4 and 5, those Debt Securities (if any) which are for the time being held by any person (including but not limited to Hungary) for the benefit of Hungary or by any public body owned or controlled, directly or indirectly, by Hungary shall (unless and until ceasing to be so held) be deemed not to remain outstanding.

6. As more fully set forth in the Fiscal Agency Agreement, Hungary has appointed the Economic Attaché of Hungary, 227 East 52nd Street, New York, New York 10022, as its authorized agent upon which process may be served in any action arising out of or based on the Debt Securities which may be instituted in any Federal or State court in New York, New York by the holder of any Debt Security, and Hungary hereby expressly accepts the jurisdiction of any such court in respect of any such action. Such appointment shall be irrevocable so long as any of the Debt Securities remain outstanding, unless and until a successor shall have been appointed by Hungary as its authorized agent for such purpose and such successor authorized agent shall have accepted such appointment. Notwithstanding the foregoing, any action arising out of or based on the Debt Securities may be instituted by the holder of any Debt Security in any competent court in Hungary. Hungary hereby waives irrevocably, to the fullest extent permitted by law, any immunity from jurisdiction to which it might otherwise be entitled in any such action which may be instituted by the holder of any Debt Security in Federal or State court in New York, New York or in any competent court in t Hungary. This waiver is intended to be effective upon execution of this Global Debt Security without further act by Hungary before any such court, and introduction of this Global Debt Security into evidence shall be final and conclusive evidence of such waiver. Such waiver constitutes only a limited and specific waiver for the purposes of the Debt Securities and under no circumstances shall it be interpreted as a general waiver by Hungary or a waiver with respect to proceedings unrelated to the Debt Securities. Neither such appointment nor such waiver shall be interpreted to include the waiver of any immunity with respect to: (i) actions brought against Hungary under U.S. State or Federal securities laws; (ii) present or future "premises of the mission" as defined in the Vienna Convention on Diplomatic Relations signed in 1961; (iii) "Consular premises" as defined in the Vienna Convention on Consular Relations signed in 1963; (iv) any other property or assets used solely or mainly for official state purposes in Hungary or elsewhere; or (v) military property or military assets or property or assets of Hungary related thereto.

7. This Global Debt Security shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law principles of such State, except with respect to its authorization and execution by Hungary, which shall be governed by the laws of Hungary.

8. Except as set forth in this Condition 8, the Debt Securities are issuable only as fully registered global securities, without coupons, each registered in the name of DTC, a nominee thereof or a successor to DTC or a nominee thereof, and

(i) no Global Debt Security may be transferred, except in whole and not in part, and only to DTC, one or more nominees of DTC or one or more respective successors of DTC and its nominees; and

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(ii) no Global Debt Security may be exchanged for any Debt Security other than another Global Debt Security.

Notwithstanding any other provisions of the Fiscal Agency Agreement or this Global Debt Security, a Global Debt Security may be transferred to, or exchanged for registered Debt Securities registered in the name of, a person other than DTC, a nominee of DTC or a successor of DTC or its nominee if:

(i) DTC or each of Euroclear Bank S.A./N.V ("Euroclear") and Clearstream Banking, S.A. ("Clearstream") (a) notifies Hungary that it is unwilling or unable to continue as depository for such Global Debt Security or (b) ceases to be a clearing agency registered under the Securities Exchange Act of 1934 at a time when it is required to be, and in either such case (a) or (b) a successor depository is not appointed by Hungary within 90 days after receiving such notice from Euroclear, Clearstream or DTC or on becoming aware that DTC is no longer so registered;

(ii) Hungary, in its sole discretion, instructs the Fiscal Agent in writing that a Global Debt Security shall be so transferable and exchangeable; or

(iii) there shall have occurred and be continuing an Event of Default and/or Event of Acceleration with respect to the Debt Securities evidenced by this Global Debt Security.

Registered Debt Securities issued in exchange for this Global Debt Security will be registered in such names, and issued in such denominations (of $2,000 and integral multiples thereof), as an authorized representative of DTC shall request.

9. Hungary will maintain for the Debt Securities (i) a Paying Agent and Registrar in the City of London, England or The City and State of New York, and (ii) if the Debt Securities are issued in definitive form, a transfer agent and paying agent in The City and State of New York. Hungary will cause the Registrar to maintain a register in which shall be entered the names and addresses of the holders of the Debt Securities of this issue and the particulars of the Debt Securities held by them respectively and in which, subject to Condition 8 above, transfers of the Debt Securities shall be registered. Such Paying Agent and Registrar in England shall be Citibank, N.A., unless and until Hungary appoints a different Paying Agent or Registrar (if applicable) in the same city. Hungary will appoint a transfer agent and paying agent as or when required in The City and State of New York. The holders of the Debt Securities may serve notices and demands with respect to the Debt Securities at the office of any Paying Agent and Registrar maintained pursuant to this Condition. In addition, all notices of Hungary will be published in a daily newspaper of general circulation in London for so long as the Debt Securities are listed on the London Stock Exchange and the rules of the London Stock Exchange so require. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once on different dates, on the first date on which publication is made.

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10. Subject to Condition 8 above, this Global Debt Security is transferable upon presentation for such purpose at the office of the Registrar referred to in Condition 9, accompanied by a written instrument of transfer in form approved by Hungary executed by the registered holder hereof or by his duly authorized attorney, whereupon this Global Debt Security will be canceled and one or more Debt Securities of this issue for an equal aggregate principal amount will be delivered to the transferee.

11. Subject to Condition 8 above, Debt Securities of this issue upon presentation for such purpose at the office of the Registrar referred to in Condition 9, accompanied by a written instrument of transfer in form approved by Hungary executed by the registered holder or by his duly authorized attorney, may be exchanged for an equal aggregate principal amount of other fully registered Debt Securities of this issue in other authorized denominations.

12. Subject to Condition 8 above, Hungary will make transfers and exchanges of Debt Securities of this issue as aforesaid upon compliance by the holders of the Debt Securities with such reasonable regulations as may be prescribed by Hungary, and Hungary shall not be entitled to make any charge in respect to transfers and exchanges of Debt Securities of this issue, other than in respect of transfer taxes, if any. Each Debt Security issued upon any such transfer or exchange shall be dated the date of its authentication by the Fiscal Agent.

13. Interest on the Debt Securities of this issue shall be computed on the basis of a 360-day year of twelve 30-day months. Unless other arrangements are made, payments of interest on this Global Debt Security will be made by check drawn on a bank or trust company in The City and State of New York payable to the order of the registered holder, or, in the case of joint holders, to the order of all such joint holders or to such person as the joint holders may request in writing, provided that payment of principal will be made only upon prior presentation and surrender of this Global Debt Security at the office of a Paying Agent of Hungary referred to in Condition 9. Such check shall be mailed to the address of the registered holder as such address shall appear on the register maintained by the Registrar pursuant to Condition 9 hereof, or, in the case of joint holders, to such registered address of that joint holder who is first named in the register as one of such joint holders or to such address specified in the aforementioned request of such joint holders. The registered holder hereof or his legal personal representatives will be regarded as exclusively entitled to the principal moneys hereby secured, and in the case of joint registered holders of this Global Debt Security the said principal monies shall be deemed to be owing to them on joint account. Any holder of Debt Securities, the aggregate principal amount of which equals or exceeds U.S.$1,000,000, may, by written notice to the Paying Agent no later than the Record Date therefor, elect to receive the interest payment in respect of such Debt Securities by wire transfer in same-day funds to a bank account maintained by such holder in the United States.

14. Claims for payment of the principal amount of this Debt Security shall become void 10 years after such principal amount became due and payable. Claims for payment of interest on this Debt Security shall become void five years after relevant interest payment date on which the interest became due and payable.

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15. In case any Debt Security shall at any time become mutilated or destroyed or stolen or lost, and such Debt Security, or evidence of the loss, theft or destruction thereof (together with the indemnity hereinafter referred to and such other documents or proof as may be required in the premises) shall be delivered to the Registrar referred to in Condition 9 above, a new Debt Security of like tenor and date will be issued by Hungary in exchange for the Debt Security so mutilated, or in lieu of the Debt Security so destroyed or stolen or lost, but, in the case of any destroyed or stolen or lost Debt Security, only upon receipt of evidence satisfactory to Hungary that such Debt Security was destroyed or stolen or lost, and, upon receipt also of indemnity satisfactory to Hungary. Mutilated Debt Securities must be surrendered before replacement therefore will be issued. Application for replacement may be made only by the registered holder thereof and shall be made at the office of the Fiscal Agent specified in Condition 1. All expenses and reasonable charges associated with procuring such indemnity and with the preparation, authentication and delivery of a new Debt Security shall be borne by the owner of the Debt Security mutilated, destroyed, stolen or lost.

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM-as tenants in common	UNIF GIFT MIN ACT-_________ Custodian __________
	(Cust)                            (Minor)
TEN ENT-as tenants by the entireties	Under Uniform Gifts to Minors Act ____________
	(State)

JT TEN-as joint tenants with right of survivorship and not as tenants in common.

Additional abbreviations may also be used though not in the above list.

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TRANSFERS

For Value Received the undersigned hereby sells, assigns and transfers unto

name and address including zip code and social security number or other identifying number of assignee the within Debt Security, hereby irrevocably constituting and appointing

Attorney to transfer the Debt Security on the register kept at the office of the Registrar of Hungary for such purpose in the Borough of Manhattan, The City of New York and State of New York, United States of America or London, with full power of substitution dated this __________ day of __________, ______.

By:
	Signature

NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within Debt Security in every particular without alteration or enlargement or any change whatsoever and must be guaranteed by a commercial bank or trust company having its principal office or correspondent in The City of New York or by a member of the New York Stock Exchange.

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EX-5.1

Exhibit 5.1

Dr. Zsolt Szita Law Office

H-1011 Budapest, Markovits I. u. 4. mfszt. 3.

Phone: +361 787-5489; Fax: +361 784-6782

e-mail: szita.zsolt@lawnet.hu

December 1, 2022

Our Ref.:

To:

J.P. Morgan SE

as Underwriter

(as named in the Pricing Agreement referred to below)

Re:

HUNGARY

USD 400,000,000 7.625% Notes due March 29, 2041

Dear Sirs,

In our capacity as Hungarian legal advisers to the Government Debt Management Agency Private Company Limited by Shares of Hungary (“Hungary”), we have advised Hungary in connection with the issuance and sale by Hungary to the underwriter (the “Underwriter”) named in Schedule I to the Pricing Agreement dated November 28, 2022 (the “Pricing Agreement”) between Hungary and the Underwriter of USD 400,000,000 aggregate principal amount of Hungary’s 7.625% Notes due 2041 (the “Debt Securities”) to be issued pursuant to the provisions of a Fiscal Agency Agreement, dated as of January 29, 2010 (the “Fiscal Agency Agreement”), between Hungary and Citibank, N.A. as fiscal agent and paying agent. In accordance with the Pricing Agreement each of the provisions of the Underwriting Agreement dated September 17, 2013 is incorporated by reference in its entirety, and shall be deemed to be a part of the Pricing Agreement, as amended therein (the “Underwriting Agreement”).

Our opinion set forth herein is being delivered to you pursuant to Section 7(c) of the Underwriting Agreement.

For the purposes of giving this opinion we have examined the following documents (hereinafter referred to as “Documents”):

a) the Registration Statement being effective as from 9:00 a.m. November 8, 2013 (file number 333-191209) filed with the Securities and Exchange Commission (the “Commission”) which includes a prospectus, relating to the Debt Securities, such prospectus, as amended or supplemented to the date hereof, is hereinafter referred to as the “Base Prospectus”);

b) the Preliminary Prospectus Supplement dated November 28, 2022 relating to the Debt Securities (the “Preliminary Prospectus Supplement”);

c) the Prospectus Supplement dated November 28, 2022 relating to the Debt Securities (the “Prospectus Supplement”);

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d) the Underwriting Agreement as filed with the Commission on September 17, 2013;

e) an executed copy of the Pricing Agreement;

f) the Fiscal Agency Agreement dated as of January 29, 2010;

g) Act No. CX of 2021 on the central budget of Hungary for the year 2022 (the “Budget Act”); and

h) power of attorney executed by Mr. Mihály Varga, Minister of Finance being the Minister Responsible for Public Finances of Hungary to Government Debt Management Agency Private Company Limited by Shares of Hungary dated November 25, 2022.

We have also examined such other documents and considered such questions of law as we have deemed necessary or appropriate for the purpose of this opinion.

Terms and expressions defined in the Underwriting Agreement or the Fiscal Agency Agreement (including by reference to any other document) shall, in the absence of contrary intention and unless otherwise defined, have the same respective meanings in this opinion.

This opinion relates only to Hungarian law as currently applied by Hungarian courts at the date of this legal opinion and we have made no investigation of the laws and regulations of any country or jurisdiction other than Hungary and we do not express or imply any opinion on such laws and regulations. We have assumed that there is nothing in the laws and regulations of any jurisdiction outside Hungary, which affects this legal opinion. Our opinion is to be construed in accordance with and is governed by the laws and regulations of Hungary.

In giving this opinion we have, with your permission, assumed the following in relation to the Documents:

a) the validity under the law of State of New York of the Documents which are expressed to be subject to that law;

b) except in relation to those of Hungary, the genuineness of all signatures, stamps and seals, the completeness, conformity to the originals and up-to-date nature of all Documents supplied to us as originals or as certified or photostatic or faxed copies and the authenticity, completeness and up-to-date nature of the originals of such Documents;

c) the due authorization, execution and delivery of the Pricing Agreement and the Fiscal Agency Agreement by each of the parties thereto (other than Hungary) and that the performance thereof is within the capacity and powers of each of the parties thereto (other than Hungary);

d) that the Documents were at their date, and remain, accurate;

e) that all parties to the Pricing Agreement and the Fiscal Agency Agreement (other than Hungary) are financial institutions licensed or qualified or otherwise entitled to execute any such Document and to perform their respective obligations and/or enforce their respective rights under any such Document pursuant to the laws and regulations of the relevant jurisdiction of incorporation;

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f) the absence of any other arrangements between any of the parties to the Pricing Agreement and the Fiscal Agency Agreement which modify or supersede any of the terms of these Documents (other than the Underwriting Agreement, being incorporated by reference into the Pricing Agreement, as referred above); and

g) the Global Debt Securities and any definitive Debt Securities are authenticated and issued in the respective forms scheduled to the Fiscal Agency Agreement.

We have also assumed that there are no provisions of the laws and regulations of any jurisdiction outside Hungary which would be contravened by the execution and delivery of the Document(s) or which would render the Document (or any part of the Document) or the performance of any of the provisions of the Document illegal or unenforceable.

We express no opinion as to matters of fact. We assume that there are no facts not disclosed to us, which would affect the conclusions in this opinion.

No opinion is expressed as to the exact interpretation, which would be placed upon any particular wording in the Documents by a Hungarian court.

Based upon the foregoing, and subject to the qualifications set out below, we are of the opinion and state respectively that so far as the present laws of Hungary are concerned:

(i) the Debt Securities have been duly authorized in accordance with the laws of Hungary;

(ii) all necessary action has been duly taken by or on behalf of Hungary to authorize the issuance and sale of the Debt Securities; the Debt Securities have been duly executed, issued and delivered in accordance with the laws of Hungary; the Debt Securities, when authenticated in accordance with the Fiscal Agency Agreement and delivered to and paid for by the Underwriters in accordance with the terms of the Pricing Agreement, will constitute valid and legally binding obligations of Hungary enforceable in accordance with their terms and entitled to the benefits of the Fiscal Agency Agreement; the Debt Securities rank at least equally in right of payment with all other unsecured and unsubordinated obligations of Hungary, except for such obligations as may be preferred by mandatory provisions of applicable law; Hungary will give no preference to one obligation over another on the basis of priority of issue date, or currency of payment; and the full faith and credit of Hungary has been pledged for the due and punctual payment of the principal of and interest on the Debt Securities and for the performance of the obligations of Hungary with respect thereto;

(iii) the obligations of Hungary under the Fiscal Agency Agreement, the Pricing Agreement and the Debt Securities are and will be direct, general and unconditional obligations of Hungary and are, under the laws of Hungary, subject to civil substantive law and to the relevant procedural and/or legal requirements relating to enforcement and recognition of foreign judgments;

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(iv) Hungary has the power and authority required for the execution and delivery of the Pricing Agreement, the issuance of the Debt Securities and the performance by Hungary of its obligations thereunder; and none of the execution or delivery by Hungary of the Pricing Agreement or the Debt Securities, the performance of its obligations thereunder or the fulfillment by Hungary of the terms thereof requires, under the laws of Hungary, any publication, waiver, consent, filing, registration, authorization or approval;

(v) the Fiscal Agency Agreement, at the time of its execution, has been duly authorized, executed and delivered by Hungary in accordance with the laws of Hungary and is a valid and binding agreement of Hungary;

(vi) the Underwriting Agreement, at the time of its execution, has been duly authorized, executed and delivered by Hungary in accordance with the laws of Hungary;

(vii) the Pricing Agreement has been duly authorized, executed and delivered by Hungary in accordance with the laws of Hungary;

(viii) subject to the qualifications of Section 17 of the Underwriting Agreement, the provisions of the Pricing Agreement and the Debt Securities wherein Hungary consents to the jurisdiction of certain courts in the United States and agrees not to assert the defense of immunity, on the grounds of sovereignty or otherwise, are valid and binding; final judgment against Hungary for the payment of money in any such suit, action or proceeding brought, in accordance with such provisions, in the Federal or state courts in New York, New York would be admissible in evidence against Hungary in the appropriate courts of Hungary to enforce such claim;

(ix) subject to the qualifications of Section 17 of the Underwriting Agreement and Condition 6 attached to the Debt Securities, under the laws of Hungary in effect as of the date of this opinion, Hungary would not be entitled to plead, or cause to be pleaded on its behalf, sovereign immunity from the jurisdiction of the courts of Hungary in respect of any action relating to the Debt Securities, the Pricing Agreement or the Fiscal Agency Agreement;

(x) none of the execution or delivery by Hungary of the Pricing Agreement or the Debt Securities, the performance by Hungary of its obligations thereunder, or the fulfillment by Hungary of the respective terms thereof, will violate any provision of the laws of Hungary or, to the best knowledge of ourselves, violate any order, rule or regulations of any court, regulatory body, or administrative body or other governmental body of Hungary;

(xi) none of the execution or delivery by Hungary of the Pricing Agreement or the Debt Securities, the performance by Hungary of its obligations thereunder, or the fulfillment by Hungary of the respective terms thereof, will, to the best knowledge of ourselves, violate, or result in a breach of, the terms of, or cause a default under, any agreement or instrument evidencing or relating to any Public External Indebtedness or any credit agreement or loan agreement with the European Union to which Hungary is a party or by which it is bound, and Hungary is not in default under the provisions of any such agreement or of any such instrument;

(xii) there is no action, suit, or proceeding pending or, to the best knowledge of ourselves, threatened against or affecting Hungary, before any court or administrative agency in Hungary, challenging the validity or enforceability of the Fiscal Agency Agreement, the Pricing Agreement or the Debt Securities or the transactions contemplated thereby, and, except as set forth in the Registration Statement, the Preliminary Prospectus Supplement, the Prospectus Supplement or the Base Prospectus, there is no legal or governmental action, suit or proceeding pending or, to the best knowledge of ourselves, threatened, to which Hungary is or may be subject that, if determined adversely to Hungary, would have a material adverse effect on the affairs and financial condition of Hungary;

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(xiii) the Registration Statement, the Preliminary Prospectus Supplement, the Prospectus Supplement and any other documents incorporated by reference in the Base Prospectus and their filing with the Commission have been duly authorized by and on behalf of Hungary, and the Registration Statement has been duly executed by and on behalf of Hungary and, to the best knowledge of ourselves, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose are pending before or threatened by the Commission;

(xiv) Mr. Tibor Tóth, State Secretary of the Ministry for National Economy, and other appropriate officials in Hungary have been apprised of the disclosure standards applicable to the offering under this Agreement and have reviewed the Preliminary Prospectus Supplement, the Prospectus Supplement and the Base Prospectus. Based on such review, the results of which have been discussed with ourselves, although we have not made an independent investigation or verification of the correctness and completeness of the information included in the Preliminary Prospectus Supplement, the Prospectus Supplement or Base Prospectus, nothing has come to the attention of ourselves that would lead us to believe that (except as to the financial statements, related schedules or other financial or statistical information contained therein as to which we need not express any belief) (A) as of its effective date, the Registration Statement or any further amendment thereto made by Hungary prior to the applicable Time of Delivery contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (B) as of its date, the Preliminary Prospectus Supplement, the Prospectus Supplement or Base Prospectus as amended or supplemented and any other documents incorporated by reference in the Preliminary Prospectus Supplement, the Prospectus Supplement or Base Prospectus as amended or supplemented or any further amendment or supplement thereto made by Hungary prior to the applicable Time of Delivery contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (C) as of the applicable Time of Delivery, either the Registration Statement or the Base Prospectus as amended or supplemented or any document incorporated by reference in the Preliminary Prospectus Supplement or Prospectus Supplement as amended or supplemented or any further amendment or supplement thereto made by Hungary prior to the applicable Time of Delivery contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; or (D) as of the Applicable Time, the Disclosure Package contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading (such statement need not express any opinion or belief as to the financial data contained in the Registration Statement or the Base Prospectus as amended or supplemented or any other documents incorporated by reference in the Preliminary Prospectus Supplement or Prospectus Supplement as amended or supplemented);

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(xv) the descriptions of the Debt Securities and the Fiscal Agency Agreement in the Registration Statement, as amended, and the Preliminary Prospectus Supplement, Prospectus Supplement or Base Prospectus fairly summarize the material provisions thereof, and the Debt Securities conform to the description thereof in the Preliminary Prospectus Supplement, Prospectus Supplement and Base Prospectus;

(xvi) the information set forth in the Preliminary Prospectus Supplement, Prospectus Supplement and Base Prospectus under the captions “Taxation— Hungarian Taxation”, “Description of the Debt Securities—Governing Law” and “Enforcement of Judgments”, insofar as such statements relate to laws of Hungary and legal matters, documents or proceedings referred to therein, are accurate and fairly present the information called for with respect to such legal matters, documents and proceedings;

(xvii) All authorizations, approvals and consents of any court, ministry, government department, branch of government or other regulatory body required for Hungary for the execution and delivery by Hungary of the Pricing Agreement with respect to the Debt Securities, and for the execution, issuance, sale and delivery of the Debt Securities thereunder and the performance of the terms of the Debt Securities, the Pricing Agreement with respect to such Debt Securities and the Fiscal Agency Agreement have been obtained and are in full force and effect;

(xviii) The choice of New York law in the Underwriting Agreement and the Pricing Agreement with respect to the Debt Securities, the Fiscal Agency Agreement and the Debt Securities is a valid choice of law under the laws of Hungary and, accordingly, would be recognized by the courts of Hungary if the Underwriting Agreement or such Pricing Agreement, the Fiscal Agency Agreement or any of the Debt Securities or any contractual claim made thereunder is brought before any such court upon proof of the relevant provisions of New York law and provided that such provisions are not contrary to the public policy of Hungary; the irrevocable submission of Hungary pursuant to Section 17 of the Underwriting Agreement, Section 10 of the Fiscal Agency Agreement and the terms and conditions of the Securities to the jurisdiction of any State or Federal court in The City of New York and the waiver by Hungary of any objection to the venue of a proceeding in any such court are legal, valid and binding; the waiver by Hungary pursuant to Section 17 Underwriting Agreement, Section 10 of the Fiscal Agency Agreement and the terms and conditions of the Debt Securities of any immunity to jurisdiction to which it may otherwise be entitled (including sovereign immunity) or to any right to which it may be entitled, is legal, valid and binding; service of process effected in the manner set forth in Section 17 of the Underwriting Agreement, Section 10 of the Fiscal Agency Agreement and the terms and conditions of the Debt Securities, assuming its validity under New York law, will be effective, insofar as Hungarian law is concerned, to confer valid personal jurisdiction over Hungary; any judgment obtained in a New York State or Federal court sitting in The City of New York arising out of or in relation to the obligations of Hungary under the Underwriting Agreement or the Pricing Agreement with respect to the Debt Securities would be recognized and enforced by the courts of Hungary, unless (i) such judgment is contrary to public policy in Hungary; (ii) the losing party or his authorized representative did not participate in the proceedings because it had no proper or timely notice of the proceedings; (iii) the proceedings in which the judgment was made seriously breached general principles of Hungarian procedural rules; (iv) proceedings between the same parties involving the same dispute were commenced in Hungary before they were commenced in the foreign court; or (v) Hungarian courts have already determined the matter (“res judicata”).

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(xix) Under the laws of Hungary in force and effect as at the Time of Delivery, other than as set forth in the Disclosure Package and the Prospectus Supplement, there is no tax, levy, deduction, charge or withholding imposed by Hungary or any political subdivision thereof either (A) on or by virtue of the execution, delivery or enforcement of the Designated Securities, the Pricing Agreement with respect to the Debt Securities or the Fiscal Agency Agreement or (B) on any payment to be made by Hungary thereunder or under the Debt Securities; and

(xx) The Pricing Agreement with respect to the Debt Securities, the Fiscal Agency Agreement and the Debt Securities (following translation of the same into the Hungarian language) are in proper legal form under the laws of Hungary for the enforcement thereof against Hungary under the laws of Hungary.

The above opinions and statements are subject to the following qualifications and reservations:

a) Where any obligation of any person is to be performed in any jurisdiction outside Hungary, such obligation may not be enforceable under Hungarian law to the extent that such performance would be illegal or contrary to public order or public policy or unenforceable under the laws of such jurisdiction and it should be noted that if a court of Hungary were required to make a determination involving interpreting the law of State of New York, this may result in significant procedural delays while appropriate guidance was sought;

b) We are not aware of any principle of public order or public policy in Hungary which would be contradicted by the Documents, nevertheless it should be noted that it is not possible to formalize an exact and definitive view of the exact scope of public order or public policy in any jurisdictions at any particular time;

c) If any Party to the Underwriting Agreement, the Fiscal Agency Agreement, the Pricing Agreement or any holder of the Debt Securities is itself a subject of, or controlled, directly or indirectly, by a person or is itself resident in, incorporated in or constituted under the laws and regulations of a country which is a designated target of, or otherwise a subject of United Nations and/or European Union sanctions, as implemented or similar sanctions implemented individually by a country, obligations of Hungary towards such party may be unenforceable or void;

d) It is possible that a judgment could only be enforced in Hungary in Hungarian forints. In the event of any proceeding being brought in a court of Hungary in respect of a payment obligation expressed to be payable in a currency other than Hungarian forints, a court of Hungary may give judgment as an order to pay the Hungarian forints equivalent of such currency at the time of actual payment of the debtor;

7

e) Under Hungarian law, provisions conferring a discretion on a party or whereby a party may determine a matter in its opinion, it may be required that such discretion not to be abused, or that it be qualified by good faith or reasonableness;

f) In this opinion Hungarian law concepts are expressed in English terms and not in their original Hungarian terms. The concepts concerned may not be identical to the concepts described by the same English terms as they exist under the laws of other jurisdictions. This opinion may, therefore, only be relied upon under the express condition that any issues of interpretation or liability arising under this legal opinion will be governed by Hungarian law and be brought before a Hungarian court;

g) It should be noted that in line with Act No. XXVIII of 2017 on International Private Law any final judgment or other ruling of a court having equal legal effect (by a court having jurisdiction in accordance with the applicable rules of the Hungarian private international law) obtained in proceedings in a foreign country will be recognised and enforced by a Hungarian court, unless (i) such judgment is contrary to public policy in Hungary; (ii) the losing party or its authorised representative did not participate in the proceedings because it had no proper or timely notice of the proceedings; (iii) the proceedings in which the judgment was made seriously breached general principles of Hungarian procedural rules; (iv) proceedings between the same parties involving the same dispute were commenced in Hungary before they were commenced in the foreign court; (v) Hungarian courts have already determined the matter (“res judicata”); or (vi) there is an earlier judgement given by a foreign court of a country differing from the country of the court delivering the judgement in question, involving the same cause of action and between the same parties, and the earlier judgment fulfils the conditions necessary for its recognition in Hungary. Taking into consideration that European Council Regulation (EC) No 1215/2012 of 10 January 2015 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters is directly applicable in Hungary, a judgment given in a member state of the European Union shall be refused in the other member states (i.e. in Hungary) if, inter alia, (i) such recognition is manifestly contrary to public policy (‘ordre public’) in the member state addressed; (ii) where the judgment was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so; (iii) the judgment is irreconcilable with a judgment given between the same parties in the member state addressed; (iv) the judgment is irreconcilable with an earlier judgment given in another member state or in a third state involving the same cause of action and between the same parties, provided that the earlier judgment fulfils the conditions necessary for its recognition in the member state in question;

h) The obligations of Hungary under the Documents are subject to any limitation arising from laws of general application relating to or affecting the rights of creditors including, without limitation, any limitation under the Act No. LIII of 1994 on the Enforcement of Judicial Decisions, as amended, of Hungary;

8

i) Claims made by or against Hungary under the Documents may be or become subject to defenses of set-off or counter-claim;

j) As used in this legal opinion, the term “enforceable” means that the Document is of a type and form enforced by Hungarian courts; it does not mean that each obligation of the parties contained in the Document or the Document will be enforced in accordance with their respective terms or in every circumstance or in foreign jurisdictions or by or against third parties or that any particular remedy will be available;

k) The actual performance of any payment obligations of Hungary under the Fiscal Agency Agreement, the Pricing Agreement or the Debt Securities is subject to prior internal authorizations and approvals, which are regular parts of the normal payment procedures of Hungary;

l) Under Hungarian law claims may become barred under applicable statutes of limitation;

m) Under Hungarian law, the effectiveness of terms exculpating a party from a liability or duty otherwise owed is limited in certain circumstances;

n) A Hungarian court may decline jurisdiction if concurrent proceedings are being brought elsewhere;

o) Although it is fairly usual in Hungarian and international capital market practice for issuers to agree and undertake pari passu ranking, it should be noted, that these kind of clauses are under wide international debate stemming mainly from the case REPUBLIC OF ARGENTINA v. NML CAPITAL, LTD. adjudicated before the courts of the United States and it is not possible to formalize an exact and definitive view of the exact scope and meaning of pari passu ranking in case of a sovereign issuer, therefore it is impossible to formalize an opinion as to the interpretation which would be placed upon the pari passu provision of the Terms and Conditions of the Notes by a Hungarian court; and

p) The concept of non-transferable national assets and national assets with priority importance (as defined in or in accordance with applicable Hungarian laws, in particular by Act No. CXCVI of 2011 on national assets) are relatively new concepts, consequently in the absence of judicial and any other official interpretation it is not possible to formalize an exact and definitive view of the exact scope of these concepts.

In rendering this opinion, we have relied without independent investigation on the opinion of Arnold & Porter LLP, special United States counsel to Hungary rendered pursuant to paragraph (d) of Section 7 of the Underwriting Agreement as to matters of New York and United States Federal law, and our opinion shall be subject to any limitations and exceptions contained in the opinion so relied upon.

Yours faithfully,

/s/ dr. Zsolt Szita LL.M.

Attorney-at-law

9

EX-5.2

Exhibit 5.2

December 1, 2022

Hungary — Government Debt Management Agency
Private Company Limited by Shares
Krisztina tér. 2.

H-1013 Budapest

Hungary

Ladies and Gentlemen:

We have acted as special United States counsel for Hungary (the “Issuer”) in connection with the issuance and offering for sale (the “Offering”) of its U.S.$400,000,000 principal amount of 7.625 % Notes due 2041 (the “Notes”) in the form of a takedown from the Issuer’s Registration Statement No. 333-191209 under Schedule B (the “Registration Statement”). In connection with the Offering, we have reviewed the Registration Statement, the Prospectus dated November 8, 2013, the Prospectus Supplement dated November 28, 2022, the Fiscal Agency Agreement dated as of September 17, 2013, between Hungary and Citibank, N.A., as Fiscal Agent (the “Fiscal Agency Agreement”), the Pricing Agreement (the “Pricing Agreement”) dated November 28, 2022, by and between the Issuer and J.P. Morgan SE, and the Underwriting Agreement (the “Underwriting Agreement”) incorporated by reference into the Pricing Agreement.

It is our opinion that, assuming due authorization, execution and delivery by the Issuer, the Notes, when duly authenticated in accordance with the terms of the Fiscal Agency Agreement and delivered and paid for in accordance with the terms of the Underwriting Agreement and the Pricing Agreement, will constitute valid and binding obligations of the Issuer under the laws of the State of New York.

Insofar as the opinion set forth herein relates to matters of the law of Hungary, we have relied upon the opinion of Dr. Zsolt Szita Law Office, Hungarian counsel of the Government Debt Management Agency Pte Ltd, dated of even date herewith and filed as an exhibit to the Annual Report of the Issuer on Form 18-K, and our opinion herein is subject to any and all exceptions and reservations set forth therein.

We consent to the filing of this opinion as an exhibit to the Annual Report of the Issuer on Form 18-K and to the references to our firm appearing under the caption “Legal Matters” in the Prospectus Supplement forming a part of the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the United States Securities and Exchange Commission.

Very truly yours,

/s/ Arnold & Porter Kaye Scholer LLP

EX-99.1

EXHIBIT 99.1

ITEMIZED LIST OF ESTIMATED EXPENSES INCURRED OR BORNE BY OR FOR THE ACCOUNT OF HUNGARY IN CONNECTION WITH THE SALE OF THE 7.625% NOTES DUE 2041

The following are the estimated expenses incurred or borne by Hungary in connection with the issuance and distribution of the Notes.

Registration Fee for the 2041 Notes *	US$	55,000
Printing Expenses	US$	7,000
Miscellaneous Expenses	US$	113,000
TOTAL	US$	175,000

*Previously paid.

EX-99.D1

Exhibit 99.D.1

RECENT DEVELOPMENTS

The information included in this section supplements the information about Hungary contained in Hungary’s Annual Report. To the extent the information in this section is inconsistent with the information contained in the Annual Report, the information in this section supersedes and replaces such information. Initially capitalized terms not defined in this section have the meanings ascribed to them in the Annual Report.

Foreign Exchange

Except as otherwise specified, all amounts in this report are expressed in Hungarian forints (“forint” or “HUF”), in euro (“euro” or “EUR”) and in U.S. dollars (“USD”). All currency conversions in this report are at the National Bank of Hungary’s (the “NBH”) official middle rate of exchange on a particular date or calculated at the average of the middle rates of exchange for a particular period. For your convenience, we have converted certain amounts from forint into USD and/or euro at the average exchange rate for each relevant period or the exchange rate in effect on a given date.

On October 31, 2022, the official middle exchange rates were HUF414.46 = USD1.00 and HUF412.01 = EUR1.00. For information on the convertibility of the forint, see “Monetary and Financial System — Exchange Rate Policy — Foreign Exchange and Convertibility of the Forint.”

Overview of Hungary

Recent Parliamentary Elections

Hungary held Parliamentary elections in April 2022. Nominees of the following parties won seats: the electoral partnership pairing Fidesz-Hungarian Civic Union (“Fidesz”) and the Christian Democrats People’s Party (“CDPP”), Mi Hazánk Mozgalom (“Mi Hazánk”), the electoral partnership of Democratic Coalition (“DK”), Jobbik — Movement for a Better Hungary (“Jobbik”), LMP — Politics Can Be Different (“LMP”), Momentum (“Momentum”), Hungarian Socialist Party (“HSP”) and Párbeszéd (“Párbeszéd”). In addition, one representative of Country Self-Governance of Germans in Hungary (Landesselbsverwaltung der Ungarndeutschen — “LdU”) was elected. Fidesz and CDPP formed an alliance before the elections and submitted a joint list of nominees.

Table 1: Composition of Parliament as of November 25, 2022

​	Number of seats		Share of seats
​	​	​	(%)
Fidesz	​	116	​	58.3
CDPP	​	19	​	9.5
Jobbik	​	9	​	4.5
HSP	​	10	​	5.0
DK	​	15	​	7.5
LMP	​	5	​	2.5
Mi Hazánk	​	6	​	3.0
Momentum	​	10	​	5.0
Párbeszéd	​	6	​	3.0
LdU	​	1	​	0.5
Independent Representatives	​	2	​	1.0
Total	​	199	​	100.00

Source: Parliament of Hungary

1

The Economy

Background

The Hungarian economy has undergone a radical transformation since the fall of communism in 1989. As with other post-communist countries in the region, the Hungarian economy during the last thirty years can be characterized by economic dislocation at the beginning of the 1990s, with gradual improvement as reforms were implemented. The highlights of these economic reforms and trends include:

(1)

An ambitious privatization program — the vast majority of Hungary’s large state-owned enterprises have been privatized. See “Privatization”;

(2)

A shift in exports from countries formerly participating in the Council for Mutual Economic Assistance (“COMECON”) to those of Western Europe and other industrialized countries. Currently, approximately three-quarters of Hungarian exports are to EU markets. See “Balance of Payments and Foreign Trade — Foreign Trade”;

(3)

The ratios of gross and net external debt (excluding intercompany loans) to GDP declined in the second half of the 1990s, but rose steadily from 2002 to 2009 before declining until 2019. In 2021, the gross and net external debt to GDP ratios increased to 60.7% and 10.7%, respectively. Meanwhile, the ratio of public sector debt to GDP, according to EU methodology, decreased from 71.4% in 1996 to 52.3% in 2001, but has increased since 2001, reaching 76.8% in 2021. See “National Debt”;

(4)

GDP grew by 4.3%, 5.4% and 4.9% in 2017, 2018 and 2019, respectively. GDP decreased by 4.5% in 2020, grew by 7.1% in 2021, and increased by 8.2%, by 6.5% and by 4.0% in the first, second and third quarter of 2022, respectively. See “— Gross Domestic Product”;

(5)

Inflation decreased dramatically from 28.3% at the end of 1995 to 2.3% as of April 2006, partly as a result of the reduction of the VAT rate. Price levels dropped by 0.9% in December 2014 mainly as a result of lower energy and food prices and a significant drop in certain public administered prices. Until December 2019, the inflation rate increased gradually to 4.0%, mainly due to increasing food price inflation and indirect tax hikes. The inflation rate decreased to 2.7% in December 2020, but increased to 7.4% in December 2021 and to 21.1% in October 2022, partly due to increasing food and fuel prices. See “— Inflation”;

(6)

Foreign direct investment (the total amount of capital invested in Hungary from abroad) has generally increased since 1995, reaching EUR118.8 billion cumulatively, as of the end of the second quarter of 2022. During the first half of 2022, the balance of net direct investment amounted to a EUR974 million outflow, compared to a EUR243 million outflow during the corresponding period of 2021. See “Balance of Payments and Foreign Trade — Foreign Direct Investment”;

(7)

The general government deficit (according to ESA methodology) as a percentage of GDP amounted to 2.5% in 2017, decreased to 2.1% in 2018, decreased to 2.0% in 2019, increased to 7.5% in 2020 and decreased to 7.1% in 2021; and

(8)

The current account had a surplus from 2010 to 2018 and had a deficit in 2019, 2020 and 2021. The surplus amounted to EUR2,536 million in 2017 and EUR216 million in 2018. The current account had a deficit in the amount of EUR1,148 million in 2019, EUR1,561 million in 2020 and EUR6,426 million in 2021.

Gross Domestic Product

The following table presents the nominal GDP at current market prices, as well as real GDP growth rates, per capita GDP and USD equivalents for the periods indicated:

2

Table 2: Gross Domestic Product

​	For the year ended December 31,										For the six months ended June 30,
​	2017		2018		2019		2020		2021		2022
Nominal GDP (HUF billions)	​	39,274.8	​	43,386.4	​	47,664.9	​	48,411.5	​	55,125.6	​	30,222.1
Annual real GDP growth rate (%)	​	4.3	​	5.4	​	4.9	​	(4.5)	​	7.1	​	7.3
Per capita GDP (HUF thousands)	​	4,012.6	​	4,438.3	​	4,878.1	​	4,965.2	​	5,677.3	​	3,105.8(1)
GDP (USD billions)	​	143.2	​	160.5	​	164.0	​	157.2	​	181.8	​	88.0(2)
Per capita GDP (USD)	​	14,630	​	16,423	​	16,784	​	16,124	​	18,719	​	9,079(1)(2)

Source: HCSO

Notes:

(1)

Calculated according to population as of the beginning of the corresponding year.

(2)

Calculated according to the average HUF/USD exchange rate of the corresponding period calculated by the NBH.

The following table shows the sectoral composition of GDP in each of the periods indicated:

Table 3: Sectoral Composition of GDP

​	For the year ended December 31,
​	2017		2018		2019		2020		2021(1)
​	(HUF billions)
Agriculture, forestry and fishing	​	1,474.5	​	1,512.6	​	1,588.7	​	1,641.9	​	1,849.2
Mining and quarrying	​	64.8	​	103.3	​	147.2	​	104.2	​	154.5
Manufacturing	​	7,511.9	​	8,028.0	​	8,311.1	​	8,385.5	​	9,344.9
Electricity, gas, steam and air conditioning supply	​	582.3	​	583.5	​	688.9	​	670.1	​	655.2
Water supply; sewerage, waste management and remediation activities	​	314.9	​	312.9	​	328.4	​	323.1	​	360.3
Industry total	​	8,473.9	​	9,027.6	​	9,475.6	​	9,483.0	​	10,514.9
Construction	​	1,411.4	​	1,855.6	​	2,305.7	​	2,327.8	​	2,854.2
Wholesale and retail trade; repair of motor vehicles and motorcycles	​	3,428.0	​	3,862.6	​	4,167.9	​	4,422.9	​	5,034.1
Transportation and storage	​	2,053.2	​	2,230.9	​	2,451.7	​	2,347.1	​	2,419.4
Accommodation and food service activities	​	599.9	​	698.2	​	792.3	​	514.0	​	747.0
Information and communication	​	1,634.9	​	1,792.8	​	1,985.8	​	2,120.2	​	2,564.3
Financial and insurance activities	​	1,196.6	​	1,287.0	​	1,513.2	​	1,615.7	​	1,838.4
Real estate activities	​	2,999.9	​	3,437.2	​	4,014.3	​	4,209.8	​	4,890.7
Professional, scientific and technical activities	​	2,002.0	​	2,256.1	​	2,509.5	​	2,628.1	​	3,025.9
Administrative and support service activities	​	1,307.2	​	1,419.3	​	1,549.0	​	1,373.0	​	1,725.1
Public administration and defence; compulsory social security	​	2,726.5	​	2,894.6	​	3,164.1	​	3,301.9	​	3,584.7
Education	​	1,524.5	​	1,637.0	​	1,773.0	​	1,846.2	​	2,016.4
Human health and social work activities	​	1,497.6	​	1,665.1	​	1,778.4	​	1,974.3	​	2,346.0
Arts, entertainment and recreation	​	482.8	​	532.2	​	590.5	​	539.6	​	657.4
Other service activities	​	489.7	​	521.1	​	589.2	​	505.9	​	570.0
Activities of households	​	6.5	​	11.9	​	8.9	​	9.1	​	8.8
Taxes less subsidies on products	​	5,965.8	​	6,744.5	​	7,407.1	​	7,551.0	​	8,479.1
Gross domestic product (at purchasers’ prices)	​	39,274.8	​	43,386.4	​	47,664.9	​	48,411.5	​	55,125.6

3

Source: HCSO

Notes:

(1)

Preliminary data. The sectoral breakdown of preliminary data differs slightly relative to the sectoral breakdown of final data.

The following table shows the sectoral composition of GDP for the six-month period ended June 30, 2022:

Table 4: Sectoral Composition of GDP

​	For the six-month period ended June 30, 2022(1)
​	(HUF billions)
Agriculture, forestry and fishing	​	666.8
Mining and quarrying; manufacturing; electricity, gas, steam and air conditioning supply; water supply; sewerage, waste management and remediation activities	​	5,743.2
Of which: manufacturing	​	5,215.9
Construction	​	1,378.9
Services, total	​	17,681.9
Of which: wholesale and retail trade; repair of motor vehicles and motorcycles; accommodation and food service activities	​	3,127.4
within it: wholesale and retail trade; repair of motor vehicles and motorcycles	​	2,621.7
within it: accommodation and food service activities	​	505.8
Of which: transportation and storage	​	1,405.8
Of which: information and communication	​	1,363.2
Of which: financial and insurance activities	​	972.2
Of which: real estate activities	​	2,900.4
Of which: professional, scientific and technical activities; administrative and support service activities	​	2,644.0
Of which: public administration and defence; compulsory social security; education; human health and social work activities	​	4,603.9
within it: public administration and defence; compulsory social security	​	2,212.8
within it: education	​	1,118.8
within it: human health and social work activities	​	1,272.4
Of which: arts, entertainment and recreation, repair of household goods and other services	​	665.0
Taxes less subsidies on products	​	4,751.3
Gross domestic product, total (at purchaser’s prices)	​	30,222.1

Source: HCSO

Notes:

(1)

Preliminary data. The sectoral breakdown of preliminary data differs slightly relative to the sectoral breakdown of final data.

The following table shows GDP expenditures at current prices in each of the periods indicated:

4

Table 5: Composition of GDP by Expenditure

​	For the year ended December 31,										For the six-month period ended June 30,
​	2017		2018		2019		2020		2021(1)		2022(1)
​	(HUF billions)
Household final consumption expenditure	​	18,938.9	​	20,506.5	​	22,547.2	​	22,946.6	​	25,555.4	​	14,934.5
Social transfers in kind from government	​	3,818.3	​	4,040.3	​	4,302.0	​	4,711.3	​	5,326.4	​	2,944.1
Social transfers in kind from NPISHs(2)	​	735.1	​	860.6	​	914.8	​	1,021.7	​	1,078.6	​	590.9
Actual final consumption of households	​	23,492.3	​	25,407.4	​	27,764.0	​	28,679.6	​	31,960.5	​	18,469.5
Actual final consumption of government	​	4,112.4	​	4,502.8	​	5,262.8	​	5,604.4	​	6,187.2	​	3,526.6
Actual final consumption, total	​	27,604.7	​	29,910.2	​	33,026.8	​	34,284.0	​	38,147.7	​	21,996.1
Gross fixed capital formation	​	8,698.6	​	10,729.9	​	12,873.3	​	12,841.3	​	14,987.9	​	7,912.6
Changes in inventories	​	305.0	​	832.8	​	585.8	​	297.9	​	1,750.5	​	1,182.9
Acquisitions less disposals of valuables	​	70.1	​	69.5	​	78.7	​	54.6	​	72.7	​	44.1
Gross capital formation, total	​	9,073.7	​	11,632.2	​	13,537.7	​	13,193.8	​	16,811.2	​	9,139.6
Domestic use, total	​	36,678.5	​	41,542.4	​	46,564.5	​	47,477.8	​	54,958.9	​	31,135.7
Exports goods	​	26,379.8	​	28,233.9	​	30,103.8	​	31,144.7	​	37,028.7	​	22,663.8
Exports services	​	7,364.9	​	8,104.8	​	8,764.9	​	6,969.0	​	7,924.6	​	4,702.6
Exports total	​	33,744.7	​	36,338.7	​	38,868.6	​	38,113.7	​	44,953.3	​	27,366.4
Imports goods	​	25,930.5	​	28,969.4	​	31,310.0	​	31,609.8	​	38,660.7	​	24,728.5
Imports services	​	5,217.9	​	5,525.3	​	6,458.2	​	5,570.1	​	6,125.9	​	3,551.4
Imports total	​	31,148.4	​	34,494.7	​	37,768.3	​	37,180.0	​	44,786.6	​	28,279.9
External balance goods	​	449.4	​	(735.6)	​	(1,206.3)	​	(465.1)	​	(1,632.1)	​	(2,064.7)
External balance services	​	2,147.0	​	2,579.6	​	2,306.6	​	1,398.9	​	1,798.7	​	1,151.2
External balance total	​	2,596.3	​	1,844.0	​	1,100.4	​	933.8	​	166.7	​	(913.6)
Gross domestic product, total total	​	39,274.8	​	43,386.4	​	47,664.9	​	48,411.5	​	55,125.6	​	30,222.1

Source: HCSO

Notes:

(1)

Preliminary data.

(2)

Non-profit institutions serving households.

The following table shows the volume indices of GDP expenditures in each of the periods indicated:

5

Table 6: Volume Indices of GDP

​

For the year ended December 31,

For the six-month period ended June 30,

​

2017

2018

2019

2020

2021(2)

2022(2)

​

(Corresponding period of the previous year = 100)

Household final consumption expenditure

​

104.7

​

104.8

​

105.1

​

98.7

​

105.0

​

111.1

Social transfers in kind from government

​

101.7

​

99.3

​

101.9

​

94.2

​

100.7

​

105.5

Social transfers in kind from NPISHs

​

114.6

​

112.9

​

101.9

​

103.4

​

101.7

​

101.8

Actual final consumption of households

​

104.5

​

104.2

​

104.5

​

98.1

​

104.2

​

109.9

Actual final consumption of government

​

103.8

​

104.2

​

109.4

​

103.9

​

103.1

​

102.5

Actual final consumption, total

​

104.4

​

104.2

​

105.2

​

99.0

​

104.0

​

108.7

Gross fixed capital formation

​

119.7

​

116.3

​

112.8

​

92.9

​

105.2

​

107.9

Changes in inventories(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

Acquisitions less disposals of valuables(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

Gross capital formation, total

​

110.1

​

115.9

​

112.1

​

93.2

​

111.7

​

109.2

Domestic use, total

​

105.7

​

107.1

​

107.1

​

97.4

​

106.2

​

108.6

Exports goods

​

106.2

​

104.0

​

104.8

​

98.8

​

110.3

​

103.2

Exports services

​

107.6

​

108.5

​

107.5

​

77.0

​

109.9

​

122.8

Exports total

​

106.5

​

105.0

​

105.4

​

93.9

​

110.3

​

106.4

Imports goods

​

109.1

​

107.5

​

106.8

​

98.3

​

109.4

​

105.6

Imports services

​

105.1

​

104.5

​

115.5

​

85.6

​

107.6

​

121.0

Imports total

​

108.4

​

107.0

​

108.2

​

96.1

​

109.1

​

107.7

External balance goods(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

External balance services(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

External balance total(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

​

n/a(1)

Gross domestic product, total total

​

104.3

​

105.4

​

104.9

​

95.5

​

107.1

​

107.3

Source: HCSO

Notes:

(1)

n/a: Not available.

(2)

Preliminary data.

In 2017, the GDP growth rate amounted to 4.3%, mainly as a result of growing consumption and increased investments. In 2018, the GDP growth rate increased to 5.4%, mainly as a result of growing consumption and increased investments. In 2019, the GDP growth rate was 4.9%, mainly as a result of a deceleration in investment. In 2020, GDP decreased by 4.5%, mainly as a result of the ongoing COVID-19 pandemic. In 2021, GDP increased by 7.1%, as a result of growing consumption, investments and external trade.

In 2021, value added by the agricultural industry declined as a result of less favorable weather conditions as compared to 2020, with the sector decreasing by 1.9%. As external demand strengthened, value added by the industrial sector (i.e., manufacturing, mining and quarrying and electricity) increased by 6.2%. Construction grew by 9.2% as infrastructure investments and home building activities both strengthened. The growth contribution of the services sector amounted to 4.8%. The COVID-19 pandemic and the resulting lockdown measures affected several sectors (including industry, construction and services) significantly in 2020 resulting in a low base effect contributing to growth in 2021.

In 2021, domestic use increased by 6.2%, and consumption increased by 4.0%. Gross fixed capital formation increased by 5.2%. Gross capital formation grew by 11.7%. Positive and increasing net exports

6

turned the 6.2% increase of domestic use into a 7.1% increase of GDP. Exports increased by 10.3% and imports increased by 9.1%. Exports increased to a larger extent compared to imports, indicating a significant improvement in external demand.

In the first half of 2022, GDP increased by 7.3% compared to the corresponding period of the previous year. Value added by the agricultural sector decreased by 23.2% mainly because weather conditions were less favorable compared to the corresponding period of the previous year. Value added by the industrial sector (i.e., manufacturing, mining and quarrying and electricity) increased by 4.4% indicating an improvement in external demand. Construction increased by 6.3%. The value added by the service sector grew by 10.5%.

In the first half of 2022, domestic use increased by 8.6%, and consumption grew by 8.7%. Gross fixed capital formation increased significantly by 7.9%. Gross capital formation grew by 9.2%, partly as a result of changes in inventories. Net exports dampened the 8.6% increase of domestic demand to a 7.3% increase of GDP. Growth in imports amounted to 7.7%, significantly exceeding growth in exports of 6.4%. Consequently, the growth contribution of the export sector was negative as net exports turned negative.

Inflation

In December 2017, the year-on-year CPI inflation rate increased to 2.1% mainly as a result of increasing energy and food prices. In December 2018, the year-on-year CPI inflation rate increased to 2.7% mainly as a result of increasing food prices and indirect tax increases imposed on alcohol and tobacco products. In December 2019, the year-on-year CPI inflation rate increased to 4.0% mainly as a result of increasing food prices and indirect tax increases imposed on alcohol and tobacco products. In December 2020, the year-on-year CPI inflation rate decreased to 2.7% mainly as a result of weak demand due to the ongoing COVID-19 pandemic. In December 2021, the year-on-year CPI inflation rate increased to 7.4% mainly as a result of strong demand and higher food and energy prices. In October 2022, the year-on-year CPI inflation rate increased to 21.1% mainly as a result of higher food and energy prices.

Wages

The following table sets forth year-on-year changes in nominal and real wages for the periods indicated:

Table 7: Wages

​	For the year ended December 31,										For the nine months ended September 30,
​	2017		2018		2019(1)		2020(1)		2021(1)		2022(1)
​	(%)
Nominal net wage index	​	12.9	​	11.3	​	11.4	​	9.7	​	8.7	​	17.5
Real net wage index	​	10.3	​	8.3	​	7.7	​	6.2	​	3.4	​	5.1

Source: HCSO

Note:

(1)

Preliminary data.

In 2017, net real wages grew by 10.3% as nominal gross wages increased at a rate significantly exceeding the inflation rate. In 2018, net real wages grew by 8.3% mainly as a result of rising nominal gross wages. In 2019, net real wages grew by 7.7% mainly as a result of rising nominal gross wages. In 2020, net real wages grew by 6.2% mainly as a result of rising nominal gross wages. In 2021, net real wages grew by 3.4% mainly as a result of rising nominal gross wages. In the first nine months of 2022, net real wages grew by 5.1% mainly as a result of rising nominal gross wages as CPI inflation was 11.8% in the first nine months of 2022.

Employment

The following table illustrates the general composition of employment and unemployment for each of the years indicated:

7

Table 8: Unemployment(1)

​	For the year ended December 31,										For the three-month period ended March 31,		For the three-month period ended June 30,		For the three-month period ended September 30,
​	2017		2018		2019		2020		2021		2022
​	(annual average, %)
Population aged 15 – 74 (thousands)	​	7,460	​	7,432	​	7,419	​	7,409	​	7,359	​	7,337	​	7,332	​	7,323
Activity rate	​	63.5	​	64.3	​	64.7	​	64.8	​	65.6	​	66.2	​	66.2	​	66.8
Employment rate	​	61.0	​	62.0	​	62.6	​	62.1	​	63.0	​	63.7	​	64.0	​	64.3
Unemployment rate	​	4.0	​	3.6	​	3.3	​	4.1	​	4.1	​	3.7	​	3.2	​	3.6

Source: HCSO

Note:

(1)

Based on the international sampling methodology pursuant to the guidelines of the International Labor Organization. Data covering population aged 15 – 74.

The unemployment rate in 2017 (calculated using the guidelines of the International Labor Organization) reached 4.0%. In addition to improving economic performance, government measures aimed at reducing unemployment played a significant role in reducing the unemployment rate. In 2018, the unemployment rate fell further to 3.6%. In 2019, the unemployment rate fell to 3.3%. The unemployment rate increased to 4.1% in 2020 mainly as a result of the COVID-19 pandemic. The unemployment rate amounted to 4.1% in 2021 remaining unchanged relative to the previous year. The unemployment rate fell to 3.7% during the three-month period ended March 31, 2022, and to 3.2% during the three-month period ended June 30, 2022, indicating a tight labor market. The unemployment rate increased to 3.6% during the three-month period ended September 30, 2022, indicating a slightly loosening labor market.

Principal Sectors of the Economy

The following tables indicate the volume indices by industry sector for the periods indicated:

Table 9: Volume Indices by Industry(1)

​	For the year ended December 31,
​	2017		2018		2019		2020		2021(3)
​	(Corresponding period of the previous year = 100)
Agriculture, forestry and fishing	​	93.3	​	105.2	​	98.1	​	92.0	​	98.1
Mining and quarrying	​	130.2	​	161.7	​	149.5	​	72.9	​	105.8
Manufacturing	​	103.3	​	102.8	​	101.8	​	92.1	​	108.9
Electricity, gas, steam and air conditioning supply	​	89.9	​	96.4	​	111.2	​	96.6	​	84.3
Water supply; sewerage, waste management and remediation activities	​	102.7	​	98.4	​	105.4	​	96.4	​	80.4
Industry total	​	102.2	​	102.6	​	103.0	​	92.3	​	106.2
Construction	​	121.2	​	115.2	​	113.1	​	91.4	​	109.2
Wholesale and retail trade; repair of motor vehicles and motorcycles	​	106.8	​	110.6	​	105.9	​	101.7	​	107.0
Transportation and storage	​	102.1	​	107.0	​	106.2	​	90.2	​	103.6
Accommodation and food service activities	​	111.3	​	107.5	​	104.8	​	55.5	​	143.2
Information and communication	​	111.3	​	110.5	​	110.4	​	106.5	​	121.7
Financial and insurance activities	​	105.8	​	105.2	​	113.6	​	104.4	​	110.4
Real estate activities	​	101.6	​	104.5	​	102.8	​	100.3	​	104.0
Professional, scientific and technical activities	​	110.5	​	111.4	​	108.1	​	102.4	​	112.3

8

​	For the year ended December 31,
​	2017		2018		2019		2020		2021(3)
​	(Corresponding period of the previous year = 100)
Administrative and support service activities	​	114.7	​	105.3	​	103.3	​	85.3	​	121.3
Public administration and defence; compulsory social security	​	98.5	​	100.4	​	99.5	​	101.7	​	101.9
Education	​	99.4	​	102.1	​	101.3	​	101.8	​	99.4
Human health and social work activities	​	101.1	​	100.6	​	101.6	​	80.0	​	104.6
Arts, entertainment and recreation	​	111.9	​	106.6	​	112.4	​	89.2	​	116.5
Other service activities	​	104.5	​	106.6	​	105.9	​	87.4	​	108.7
Activities of households	​	95.3	​	173.3	​	69.4	​	94.2	​	90.6
Taxes less subsidies on products(2)	​	n/a	​	n/a	​	n/a	​	n/a	​	n/a
Gross domestic product (at purchasers’ prices)	​	104.3	​	105.4	​	104.9	​	95.5	​	107.1

Source: HCSO

Notes:

(1)

Data unadjusted for calendar-day effect.

(2)

n/a: Not available.

(3)

Preliminary data.

Table 10: Volume Indices by Industry

​	For the six-month period ended June 30, 2022(3)
​	(Corresponding period of the previous year = 100)
Agriculture, forestry and fishing	​	76.8
Mining and quarrying; manufacturing; electricity, gas, steam and air conditioning supply; water supply; sewerage, waste management and remediation activities	​	104.4
Of which: manufacturing	​	104.7
Construction	​	106.3
Services, total	​	110.5
Of which: wholesale and retail trade; repair of motor vehicles and motorcycles; accommodation and food service activities	​	114.8
within it: wholesale and retail trade; repair of motor vehicles and motorcycles	​	108.4
within it: accommodation and food service activities	​	161.0
Of which: transportation and storage	​	120.8
Of which: information and communication	​	113.0
Of which: financial and insurance activities	​	106.3
Of which: real estate activities	​	105.8
Of which: professional, scientific and technical activities; administrative and support service activities	​	113.6
Of which: public administration and defence; compulsory social security; education; human health and social work activities	​	104.8
within it: public administration and defence; compulsory social security	​	101.1
within it: education	​	103.2
within it: human health and social work activities	​	111.9
Of which: arts, entertainment and recreation, repair of household goods and other services	​	117.5
Taxes less subsidies on products(2)	​	n/a
Gross domestic product, total (at purchaser’s prices)	​	107.3

9

Source: HCSO

Notes:

(1)

Data unadjusted for calendar-day effect.

(2)

n/a: Not available.

(3)

Preliminary data.

Industry

According to volume indices compiled by HCSO, gross industrial production increased by 9.2%, and total sales grew by 9.4%, in 2021. Between 2018 and 2021, industrial export sales amounted to more than 60% of the total sales of the sector. In 2021, export sales increased by 8.9%, and domestic sales grew by 10.3%. In 2021, 95.5% of total industrial production was attributable to manufacturing. The value of mining and quarrying production amounted to 0.4% of total industrial production, and the value of electricity, gas, steam and air conditioning supply production amounted to 4.1% of total industrial production.

According to preliminary volume indices compiled by HCSO, export sales increased by 7.9%, while domestic sales grew by 7.4% during the nine-month period ended September 30, 2022. As a result, total sales increased by 7.7%, and gross production grew by 6.4% during the nine-month period ended September 30, 2022, according to preliminary data.

Manufacturing

In 2021, gross production in the manufacturing sector increased by 9.0% and total manufacturing sales increased by 7.5%. In 2021, export sales in manufacturing increased by 6.1%, while domestic sales increased by 11.3%. In 2021, approximately half of manufacturing production was attributable to three subsectors: the manufacture of transport equipment; the manufacture of computer, electronic and optical products; and the manufacture of food products, beverages and tobacco products.

During the nine-month period ended September 30, 2022, export sales in manufacturing increased by 6.5%, and domestic sales increased by 4.8%. As a result, total manufacturing sales increased by 6.0%, and gross production increased by 6.5% during the nine-month period ended September 30, 2022.

Manufacture of Food Products, Beverages and Tobacco Products

In 2021, gross production in the manufacture of food products, beverages and tobacco products subsector grew by 8.5%, and total sales increased by 8.3%. In 2021, export sales in this subsector increased by 10.1%, and domestic sales grew by 7.1%. During the nine-month period ended September 30, 2022, export sales grew by 14.6%, and domestic sales increased by 4.2%. As a result, during the nine-month period ended September 30, 2022, total sales grew by 8.7%, and gross production increased by 10.5%.

Manufacture of Computer, Electronic and Optical Products

In 2021, gross production in the manufacture of computer, electronic and optical products subsector increased by 5.6%, and total sales grew by 5.4%. In 2021, export sales in this subsector increased by 4.0%, and domestic sales grew by 41.7%. During the nine-month period ended September 30, 2022, export sales grew by 9.7%, and domestic sales increased by 7.3%. As a result, during the nine-month period ended September 30, 2022, total sales grew by 9.6%, and gross production increased by 10.6%.

Manufacture of Transport Equipment

In 2021, gross production in the manufacture of transport equipment subsector decreased by 2.2%, and total sales decreased by 2.4%. In 2021, export sales in this subsector decreased by 2.5%, while domestic sales decreased by 2.2%. During the nine-month period ended September 30, 2022, export sales increased by 9.8%, and domestic sales decreased by 1.7%. As a result, during the nine-month period ended September 30, 2022, total sales grew by 9.0%, and gross production increased by 9.5%.

10

Construction

In 2021, the output of the construction sector increased by 12.1% compared to 2020. In 2021, the construction of buildings grew by 16.7% compared to 2020. In 2021, civil engineering works increased by 6.7%. Output of the construction sector increased by 4.8% in the nine-month period ended September 30, 2022, compared to the same period in 2021. Civil engineering construction increased by 2.0% in the nine-month period ended September 30, 2022, compared to the same period in 2021. Building construction increased by 7.1% in the nine-month period ended September 30, 2022, compared to the corresponding period in 2021.

Service Industries

Gross value added by services increased by 10.5% during the six-month period ended June 30, 2022.

In 2021, twelve out of fourteen service subsectors increased, and two service subsectors decreased. The twelve service subsectors that increased were (i) wholesale and retail trade; repair of motor vehicles and motorcycles; (ii) transportation and storage; (iii) accommodation and food service activities; (iv) information and communication; (v) financial and insurance activities; (vi) real estate activities; (vii) professional, scientific and technical activities; (viii) administrative and support service activities; (ix) public administration and defence; compulsory social security; (x) human health and social work activities; (xi) arts, entertainment and recreation; and (xii) other service activities, increasing by 7.0%, 3.6%, 43.2%, 21.7%, 10.4%, 4.0%, 12.3%, 21.3%, 1.9%, 4.6%, 16.5% and 8.7%, respectively. The two service subsectors that decreased were (i) education; and (ii) activities of households, decreasing by 0.6% and 9.4%, respectively.

The Central Statistical Office of Hungary uses a slightly different sectoral breakdown for annual data than for quarterly data.

In the six-month period ended June 30, 2022, all eight service subsectors increased, and no service subsectors decreased. The eight service subsectors that increased were (i) wholesale and retail trade; repair of motor vehicles and motorcycles; accommodation and food service activities; (ii) transportation and storage; (iii) information and communication; (iv) financial and insurance activities; (v) real estate activities; (vi) professional, scientific and technical activities; administrative and support service activities; (vii) public administration and defense; compulsory social security; education; human health and social work activities; and (viii) arts, entertainment and recreation; repair of household goods and other services, increasing by 14.8%, 20.8%, 13.0%, 6.3%, 5.8%, 13.6%, 4.8% and 17.5%, respectively.

The following table sets forth the composition of the service industry per individual subsector for the periods indicated:

Table 11: Composition of Service Industry per Subsector

​	For the year ended December 31,
​	2017		2018		2019		2020		2021(1)
​	(%)
Wholesale and retail trade; repair of motor vehicles and motorcycles	​	15.6	​	15.9	​	15.5	​	16.1	​	16.0
Transportation and storage	​	9.4	​	9.2	​	9.1	​	8.6	​	7.7
Accommodation and food service activities	​	2.7	​	2.9	​	2.9	​	1.9	​	2.4
Information and communication	​	7.4	​	7.4	​	7.4	​	7.7	​	8.2
Financial and insurance activities	​	5.5	​	5.3	​	5.6	​	5.9	​	5.8
Real estate activities	​	13.7	​	14.2	​	14.9	​	15.4	​	15.6
Professional, scientific and technical activities	​	9.1	​	9.3	​	9.3	​	9.6	​	9.6
Administrative and support service activities	​	6.0	​	5.9	​	5.8	​	5.0	​	5.5
Public administration and defence; compulsory social security	​	12.4	​	11.9	​	11.8	​	12.0	​	11.4
Education	​	6.9	​	6.8	​	6.6	​	6.7	​	6.4

11

​	For the year ended December 31,
​	2017		2018		2019		2020		2021(1)
​	(%)
Human health and social work activities	​	6.8	​	6.9	​	6.6	​	7.2	​	7.5
Arts, entertainment and recreation	​	2.2	​	2.2	​	2.2	​	2.0	​	2.1
Other service activities	​	2.2	​	2.1	​	2.2	​	1.8	​	1.8
Activities of households	​	0.0	​	0.0	​	0.0	​	0.0	​	0.0
Services, total	​	100.0	​	100.0	​	100.0	​	100.0	​	100.0

Source: HCSO

Notes:

(1)

Preliminary data.

Table 12: Composition of the Service Industry per Subsector

​	For the six-month period ended June 30, 2022(1)
​	(%)
Wholesale and retail trade; repair of motor vehicles and motorcycles; accommodation and food service activities	​	17.7
within it: wholesale and retail trade; repair of motor vehicles and motorcycles	​	14.8
within it: accommodation and food service activities	​	2.9
Transportation and storage	​	8.0
Information and communication	​	7.7
Financial and insurance activities	​	5.5
Real estate activities	​	16.4
Professional, scientific and technical activities; administrative and support service activities	​	15.0
Public administration and defence; compulsory social security; education; human health and social work activities	​	26.0
within it: public administration and defence; compulsory social security	​	12.5
within it: education	​	6.3
within it: human health and social work activities	​	7.2
Arts, entertainment and recreation, repair of household goods and other services	​	3.8
Services, total	​	100.0

Source: HCSO

Notes:

(1)

Preliminary data.

Agriculture

In 2021, production of wheat, maize and barley amounted to 5.3 million tons, 6.5 million tons and 1.7 million tons, respectively. In 2021, the production of sunflower seed, sugar beet and rape seed amounted to 1.8 million tons, 0.7 million tons and 0.7 million tons, respectively. In 2022, production of wheat amounted to 4.2 million tons, and the production of barley reached 1.5 million tons.

12

Balance of Payments and Foreign Trade

Balance of Payments

The following tables set out the balance of payments of Hungary for the periods indicated:

Table 13: Balance of Payments

​	For the year ended December 31,
​	2017		2018		2019		2020		2021
​	(EUR millions)
1. Current account, net (1.A+1.B+1.C)	​	2,535.9	​	215.9	​	(1,148.3)	​	(1,561.0)	​	(6,426.3)
1.A. Goods and Services, net	​	8,658.6	​	5,799.9	​	3,402.2	​	2,669.6	​	468.1
Exports	​	109,101.7	​	113,939.1	​	119,442.1	​	108,544.4	​	125,352.0
Imports	​	100,443.1	​	108,139.2	​	116,039.9	​	105,874.8	​	124,883.9
1.A.a. Goods, net	​	1,712.0	​	(2,280.0)	​	(3,686.9)	​	(1,334.4)	​	(4,562.2)
Exports	​	85,285.1	​	88,543.6	​	92,524.6	​	88,655.2	​	103,231.7
Imports	​	83,573.1	​	90,823.6	​	96,211.5	​	89,989.6	​	107,793.9
1.A.b. Services, net	​	6,946.6	​	8,079.9	​	7,089.1	​	4,004.0	​	5,030.4
Exports	​	23,816.6	​	25,395.6	​	26,917.5	​	19,889.2	​	22,120.3
Imports	​	16,870.1	​	17,315.6	​	19,828.4	​	15,885.2	​	17,089.9
1.B. Primary income, net	​	(5,020.5)	​	(5,037.2)	​	(3,722.9)	​	(3,510.3)	​	(5,177.8)
1.B.1. Compensation of employees, net	​	2,627.2	​	2,437.2	​	2,657.9	​	2,022.2	​	1,566.2
1.B.2. Investment income, net	​	(8,869.1)	​	(8,674.4)	​	(7,523.1)	​	(6,755.4)	​	(7,881.4)
1.B.2.1. Direct investment income, net	​	(7,343.6)	​	(7,349.0)	​	(6,313.8)	​	(5,984.5)	​	(7,022.7)
1.B.2.2. Portfolio investment income, net	​	(1,468.9)	​	(1,314.5)	​	(1,248.8)	​	(771.5)	​	(804.9)
1.B.2.3. Other investment income, net	​	(243.9)	​	(203.3)	​	(204.2)	​	(219.4)	​	(206.9)
1.B.2.4. Reserve assets, net	​	187.3	​	192.5	​	243.7	​	220.0	​	153.1
1.B.3. Other primary income, net	​	1,221.4	​	1,200.0	​	1,142.3	​	1,222.9	​	1,137.4
– of which: EU transfers	​	1,221.4	​	1,200.0	​	1,142.3	​	1,222.9	​	1,137.4
1.C. Secondary income, net	​	(1,102.1)	​	(546.8)	​	(827.6)	​	(720.3)	​	(1,716.6)
– of which: EU transfers	​	103.2	​	588.9	​	293.1	​	119.6	​	(1,144.2)
2. Capital account, net	​	1,075.4	​	3,062.9	​	2,700.6	​	2,792.9	​	3,925.5
– of which: EU transfers	​	1,353.3	​	2,234.7	​	2,787.3	​	3,135.2	​	3,944.5
3. Financial account (net assets) (3.1+3.2+3.3+3.4+3.5)	​	1,865.6	​	1,318.7	​	(60.9)	​	(2,470.4)	​	(5,906.2)
3.1. Direct investment (net assets)	​	(2,036.8)	​	(2,611.8)	​	(1,128.4)	​	(2,359.5)	​	(2,832.6)
3.1.k. Abroad (net assets)	​	1,096.8	​	2,811.0	​	2,789.0	​	3,769.9	​	3,472.2
3.1.1.k Equity (net assets)	​	216.4	​	3,346.9	​	2,657.1	​	3,844.5	​	2,491.4
3.1.1.1.ki Equity other than reinvestment of earnings (net assets)	​	(854.2)	​	2,501.1	​	1,607.7	​	2,871.7	​	1,060.4
3.1.1.2.ki Reinvestment of earnings (net assets)	​	1,070.6	​	845.8	​	1,049.4	​	972.7	​	1,431.0
3.1.2.ki Debt instruments (net assets)	​	880.4	​	(535.9)	​	132.0	​	(74.6)	​	980.8
3.1.2.1.ki Assets	​	885.8	​	38.6	​	275.6	​	(159.9)	​	850.0
3.1.2.2.ki Liabilities	​	5.4	​	574.5	​	143.7	​	(85.3)	​	(130.8)
3.1.t In Hungary (net liabilities)	​	3,133.6	​	5,422.9	​	3,917.5	​	6,129.4	​	6,304.7

13

​	For the year ended December 31,
​	2017		2018		2019		2020		2021
​	(EUR millions)
3.1.1.t Equity (net liabilities)	​	8,410.1	​	4,713.2	​	5,593.0	​	2,440.4	​	585.3
3.1.1.1.be Equity other than reinvestment of earnings (net liabilities)	​	2,322.4	​	(907.7)	​	1,248.5	​	(1,114.9)	​	(4,930.3)
3.1.1.2.be Reinvestment of earnings (net liabilities)	​	6,087.7	​	5,620.9	​	4,344.4	​	3,555.2	​	5,515.6
3.1.2.be Debt instruments (net liabilities)	​	(5,276.5)	​	709.7	​	(1,675.5)	​	3,689.0	​	5,719.5
3.1.2.1.be Assets	​	3,890.0	​	673.6	​	(1,002.8)	​	(2,875.0)	​	979.7
3.1.2.2.be Liabilities	​	(1,386.5)	​	1,383.3	​	(2,678.3)	​	814.0	​	6,699.2
3.2. Portfolio investment (net assets)	​	3,761.4	​	(184.6)	​	1,544.5	​	(2,481.2)	​	327.0
3.2.k Assets	​	1,916.5	​	(140.2)	​	258.3	​	623.8	​	2,713.4
3.2.t Liabilities	​	(1,844.9)	​	44.4	​	(1,286.3)	​	3,105.0	​	2,386.4
3.3. Financial derivatives (other than reserves), net assets	​	(1,049.6)	​	(932.7)	​	21.8	​	(443.9)	​	(1,664.6)
3.3.k Assets	​	(4,616.5)	​	(4,432.1)	​	(3,601.2)	​	(6,493.2)	​	(7,300.8)
3.3.t Liabilities	​	(3,566.9)	​	(3,499.4)	​	(3,623.0)	​	(6,049.2)	​	(5,636.2)
3.4. Other investment (net assets)	​	1,162.6	​	1,450.3	​	(824.2)	​	(3,116.6)	​	(5,523.9)
3.4.k Assets	​	1,750.5	​	2,666.3	​	930.0	​	1,722.3	​	3,877.4
3.4.t Liabilities	​	587.9	​	1,216.0	​	1,754.3	​	4,838.9	​	9,401.3
3.5. Reserve assets	​	27.9	​	3,597.5	​	325.4	​	5,930.9	​	3,787.8
Memorandum:	​	​	​	​	​	​	​	​	​	​
Net external financing capacity	​	​	​	​	​	​	​	​	​	​
Net external financing capacity (CA and Capital account)	​	3,611.3	​	3,278.8	​	1,552.2	​	1,231.8	​	(2,500.8)
Financial account balance	​	1,865.6	​	1,318.7	​	(60.9)	​	(2,470.4)	​	(5,906.2)
Difference (Net errors and omissions)	​	(1,745.8)	​	(1,960.1)	​	(1,613.2)	​	(3,702.2)	​	(3,405.4)
Reserve assets (stock)	​	23,367.9	​	27,402.5	​	28,385.2	​	33,677.3	​	38,376.9
Gross external debt denominated in foreign currencies (excl. direct investment debt instruments)	​	54,354.3	​	51,627.2	​	52,002.3	​	57,666.8	​	69,342.4
– o/w: General government and Central bank	​	22,923.7	​	20,848.4	​	19,859.3	​	26,658.5	​	34,982.9
Net external debt denominated in foreign currencies (excl. direct investment debt instruments)	​	(333.9)	​	(8,077.3)	​	(9,125.7)	​	(8,792.1)	​	(2,783.3)
– o/w: General government and Central bank	​	(571.7)	​	(5,680.3)	​	(7,483.2)	​	(6,330.5)	​	110.3

Source: NBH

The current account deficit amounted to EUR6,426 million in 2021, mainly due to a large deficit in primary and secondary income offsetting the surplus in goods and services. During 2021, direct investment amounted to a net inflow, reaching EUR2,833 million compared to a net inflow of EUR2,359 million in 2020.

During the six-month period ended June 30, 2022, EU countries accounted for 77% of Hungary’s exports and 70% of imports.

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Foreign Direct Investment

The following table sets forth historical records of foreign direct investment (“FDI”) in Hungary and Hungarian direct investments abroad during the years indicated:

Table 14: Foreign Direct Investment Flows

​	For the year ended December 31,
​	2017		2018		2019		2020		2021
​	(EUR millions)
3.1. Direct investment (net assets)	​	(2,036.8)	​	(2,611.8)	​	(1,128.4)	​	(2,359.5)	​	(2,832.6)
3.1.k. Abroad (net assets)	​	1,096.8	​	2,811.0	​	2,789.0	​	3,769.9	​	3,472.2
3.1.1.k Equity (net assets)	​	216.4	​	3,346.9	​	2,657.1	​	3,844.5	​	2,491.4
3.1.1.1.ki Equity other than reinvestment of earnings (net assets)	​	(854.2)	​	2,501.1	​	1,607.7	​	2,871.7	​	1,060.4
3.1.1.2.ki Reinvestment of earnings (net assets)	​	1,070.6	​	845.8	​	1,049.4	​	972.7	​	1,431.0
3.1.2.ki Debt instruments (net assets)	​	880.4	​	(535.9)	​	132.0	​	(74.6)	​	980.8
3.1.2.1.ki Assets	​	885.8	​	38.6	​	275.6	​	(159.9)	​	850.0
3.1.2.2.ki Liabilities	​	5.4	​	574.5	​	143.7	​	(85.3)	​	(130.8)
3.1.t In Hungary (net liabilities)	​	3,133.6	​	5,422.9	​	3,917.5	​	6,129.4	​	6,304.7
3.1.1.t Equity (net liabilities)	​	8,410.1	​	4,713.2	​	5,593.0	​	2,440.4	​	585.3
3.1.1.1.be Equity other than reinvestment of earnings (net liabilities)	​	2,322.4	​	(907.7)	​	1,248.5	​	(1,114.9)	​	(4,930.3)
3.1.1.2.be Reinvestment of earnings (net liabilities)	​	6,087.7	​	5,620.9	​	4,344.4	​	3,555.2	​	5,515.6
3.1.2.be Debt instruments (net liabilities)	​	(5,276.5)	​	709.7	​	(1,675.5)	​	3,689.0	​	5,719.5
3.1.2.1.be Assets	​	3,890.0	​	673.6	​	(1,002.8)	​	(2,875.0)	​	979.7
3.1.2.2.be Liabilities	​	(1,386.5)	​	1,383.3	​	(2,678.3)	​	814.0	​	6,699.2

Source: NBH

In 2017, net FDI amounted to an inflow of EUR2,037 million. In 2018, net FDI inflow increased, reaching EUR2,612 million. In 2019, net FDI inflow decreased, reaching EUR1,128 million. In 2020, net FDI inflow increased, reaching EUR2,359 million. In 2021, net FDI inflow increased further, reaching EUR2,833 million.

As of December 31, 2021, the cumulative FDI in Hungary amounted to EUR119.7 billion.

The following table sets forth certain information regarding FDI in Hungary and Hungarian direct investments abroad during the three months ended March 31, 2022 and June 30, 2022 as compared to the same period in 2021:

Table 15: Foreign Direct Investment Flows: First and Second Quarter of 2021 and 2022

​	For the three-month period ended
​	March 31, 2021		June 30, 2021		March 31, 2022		June 30, 2022
3.1. Direct investment (net assets)	​	438.7	​	(196.0)	​	1,476.4	​	(502.8)
3.1.k. Abroad (net assets)	​	875.0	​	162.8	​	1,922.2	​	68.5
3.1.1.k Equity (net assets)	​	949.7	​	234.1	​	1,354.9	​	59.3
3.1.1.1.ki Equity other than reinvestment of earnings (net assets)	​	476.3	​	174.0	​	978.2	​	(65.6)
3.1.1.2.ki Reinvestment of earnings (net assets)	​	473.4	​	60.1	​	376.8	​	124.9

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​	For the three-month period ended
​	March 31, 2021		June 30, 2021		March 31, 2022		June 30, 2022
3.1.2.ki Debt instruments (net assets)	​	(74.7)	​	(71.3)	​	567.2	​	9.2
3.1.2.1.ki Assets	​	132.6	​	807.7	​	542.7	​	15.5
3.1.2.2.ki Liabilities	​	207.3	​	879.0	​	(24.5)	​	6.3
3.1.t In Hungary (net liabilities)	​	436.3	​	358.8	​	445.7	​	571.3
3.1.1.t Equity (net liabilities)	​	(4,330.4)	​	(552.2)	​	(60.9)	​	(1,410.7)
3.1.1.1.be Equity other than reinvestment of earnings (net liabilities)	​	(5,054.7)	​	(674.8)	​	(778.4)	​	(1,067.0)
3.1.1.2.be Reinvestment of earnings (net liabilities)	​	724.3	​	122.6	​	717.5	​	(343.7)
3.1.2.be Debt instruments (net liabilities)	​	4,766.7	​	910.9	​	506.6	​	1,982.0
3.1.2.1.be Assets	​	1,983.2	​	(819.6)	​	1,732.8	​	(936.6)
3.1.2.2.be Liabilities	​	6,749.9	​	91.4	​	2,239.4	​	1,045.4

Source: NBH

During the six-month period ended June 30, 2022, the balance of direct investment showed a net outflow of EUR974 million compared to the EUR243 million net inflow during the same period of 2021.

Foreign direct investment abroad during the six-month period ended June 30, 2022 generated a net outflow of EUR1,991 million, while in the corresponding period of 2021, foreign direct investment abroad generated a net outflow of EUR1,038 million. During the six-month period ended June 30, 2022, foreign direct investment abroad in the form of debt instruments amounted to a net outflow of EUR576 million, compared to a net inflow of EUR146 million during the corresponding period of 2021. During the six-month period ended June 30, 2022, foreign direct investment abroad in the form of equity capital (including reinvestment of earnings and equity) amounted to a net EUR1,414 million outflow; during the corresponding period of 2021, net capital outflow amounted to EUR1,184 million. During the six-month period ended June 30, 2022, foreign direct investment abroad in the form of reinvestment of earnings amounted to a net outflow of EUR502 million; during the corresponding period of 2021, net capital outflow amounted to EUR534 million. During the six-month period ended June 30, 2022, foreign direct investment abroad in the form of equity capital (excluding reinvestment of earnings) amounted to a net outflow of EUR913 million; during the corresponding period of 2021, net capital outflow amounted to EUR650 million.

Foreign direct investment in Hungary in the six-month period ended June 30, 2022 generated a net inflow of EUR1,017 million, while in the corresponding period of 2021, foreign direct investment in Hungary generated a net inflow of EUR795 million. During the six-month period ended June 30, 2022, foreign direct investment in Hungary in the form of debt instruments amounted to a net inflow of EUR2,489 million; during the corresponding period of 2021, net capital inflow amounted to EUR5,678 million. During the six-month period ended June 30, 2022, foreign direct investment in Hungary in the form of equity capital (including reinvestment of earnings and equity) amounted to a net outflow of EUR1,472 million; during the corresponding period of 2021, net capital outflow amounted to EUR4,883 million. During the six-month period ended June 30, 2022, foreign direct investment in Hungary in the form of reinvestment of earnings amounted to a net inflow of EUR374 million; during the corresponding period of 2021, net capital inflow amounted to EUR847 million. During the six-month period ended June 30, 2022, foreign direct investment in Hungary in the form of equity capital (excluding reinvestment of earnings) amounted to a net outflow of EUR1,845 million; during the corresponding period of 2021, net capital outflow amounted to EUR5,729 million.

In recent years, reinvested earnings in Hungary and FDI in the form of other capital have been relatively high, amounting to approximately half of the balance of net income on equities. Further, the increasing investment by Hungarian companies in the form of equity capital abroad has primarily been a result of certain Hungarian companies seeking to increase their footprint in the Central-Eastern European region generally.

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Foreign Exchange Reserves

The following table presents the level of Hungary’s gold and foreign exchange reserves as of the dates indicated:

Table 16: Gold and Foreign Exchange Reserves

​	As of December 31,										As of October 31,
​	2017		2018		2019		2020		2021		2022
​	(EUR millions)
International net gold reserves(1)	​	107.0	​	1,129.9	​	1,376.2	​	1,562.6	​	4,875.9	​	5,045.0
Foreign exchange(2)	​	23,261.3	​	26,273.2	​	27,009.5	​	32,114.8	​	33,501.3	​	31,839.0
Total	​	23,368.3	​	27,403.1	​	28,385.6	​	33,677.4	​	38,377.1	​	36,883.9

Source: NBH

Notes:

(1)

Gold valued at London rates fixed on the relevant date.

(2)

Consists of foreign currencies, including the counterparts of swapped gold, special drawing rights — SDR, reserve position in the IMF and other reserve assets, converted at exchange rates at the dates shown.

Monetary and Financial System

The following table sets forth the amount of one-week deposits as of the end of the periods indicated:

Table 17: Stock of One-Week Deposits

​	Stock as of end of the month
​	HUF billions
April 2020	​	671.50
May 2020	​	1,066.30
June 2020	​	1,646.40
July 2020	​	2,321.70
August 2020	​	2,049.40
September 2020	​	1,925.00
October 2020	​	2,340.10
November 2020	​	2,907.70
December 2020	​	3,049.00
January 2021	​	4,132.00
February 2021	​	5,132.80
March 2021	​	3,784.30
April 2021	​	4,738.50
May 2021	​	4,938.60
June 2021	​	4,372.40
July 2021	​	5,628.19
August 2021	​	5,937.59
September 2021	​	5,157.20

17

​	Stock as of end of the month
​	HUF billions
October 2021	​	6,755.98
November 2021	​	7,723.28
December 2021	​	6,447.28
January 2022	​	9,761.48
February 2022	​	10,201.22
March 2022	​	7,894.18
April 2022	​	10,070.48
May 2022	​	9,474.10
June 2022	​	7,262.80
July 2022	​	8,580.80
August 2022	​	9,799.53
September 2022	​	6,150.90

Source: NBH

According to the Quarterly Report on Inflation (the “Report on Inflation”) published on September 29, 2022, there is a high probability that the 2022 and 2023 inflation targets will not be achieved. In the Report on Inflation, the NBH estimated that the average annual inflation for 2022 would be between 13.5% and 14.5%, exceeding the 3% long-term inflation target rate. The inflation rate is projected to be in the range between 11.5% and 14.0% in 2023, still exceeding the 3% long-term inflation target rate. The inflation rate is projected to decrease to the range between 2.5% and 4.0% in 2024, which is in line with the 3% long-term inflation target rate.

Interest Rate Policy

The following table sets forth changes in the central bank base rate, the interest rate on the overnight deposit facility and the overnight interest rate on collateralized loans:

Table 18: Selected Interest Rates

​	Central bank base rate		Interest rate on overnight collateralized loan		Interest rate on overnight deposit
​	percent
Date	​	​	​	​	​	​
September 25, 2015	​	1.35	​	2.10	​	0.10
March 23, 2016	​	1.20	​	1.45	​	(0.05)
April 27, 2016	​	1.05	​	1.30	​	(0.05)
May 25, 2016	​	0.90	​	1.15	​	(0.05)
October 26, 2016	​	0.90	​	1.05	​	(0.05)
November 23, 2016	​	0.90	​	0.90	​	(0.05)
September 20, 2017	​	0.90	​	0.90	​	(0.15)
December 19, 2018	​	0.90	​	0.90	​	(0.15)
March 27, 2019	​	0.90	​	0.90	​	(0.05)
April 8, 2020	​	0.90	​	1.85	​	(0.05)
June 24, 2020	​	0.75	​	1.85	​	(0.05)

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​	Central bank base rate		Interest rate on overnight collateralized loan		Interest rate on overnight deposit
​	percent
July 22, 2020	​	0.60	​	1.85	​	(0.05)
June 23, 2021	​	0.90	​	1.85	​	(0.05)
July 28, 2021	​	1.20	​	2.15	​	0.25
August 25, 2021	​	1.50	​	2.45	​	0.55
September 22, 2021	​	1.65	​	2.60	​	0.70
October 20, 2021	​	1.80	​	2.75	​	0.85
November 17, 2021	​	2.10	​	3.05	​	1.15
December 1, 2021	​	2.10	​	4.10	​	1.60
December 15, 2021	​	2.40	​	4.40	​	2.40
January 26, 2022	​	2.90	​	4.90	​	2.90
February 23, 2022	​	3.40	​	5.40	​	3.40
March 9, 2022	​	3.40	​	6.40	​	3.40
March 23, 2022	​	4.40	​	7.40	​	4.40
April 27, 2022	​	5.40	​	8.40	​	5.40
June 1, 2022	​	5.90	​	8.90	​	5.90
June 29, 2022	​	7.75	​	10.25	​	7.25
July 13, 2022	​	9.75	​	12.25	​	9.25
July 27, 2022	​	10.75	​	13.25	​	10.25
August 31, 2022	​	11.75	​	14.25	​	11.25
September 28, 2022	​	13.00	​	15.50	​	12.50
October 14, 2022	​	13.00	​	25.00	​	12.50

Source: NBH

Effective as of September 28, 2022, the Monetary Council raised the central bank base rate by 125 basis points to 13.00%. The Monetary Council also increased the overnight deposit rate by 125 basis points to 12.50% and the overnight and the one-week collateralized lending rate by 125 basis points to 15.50%.

Effective as of October 14, 2022, the Monetary Council raised the overnight collateralized lending rate by 950 basis points to 25.00%. The central bank base rate and the overnight deposit rate remained unchanged at 13.00% and 12.50%, respectively.

Effective as of November 23, 2022, the Monetary Council left the overnight collateralized lending rate, the central bank base rate and the overnight deposit rate unchanged at 25.00%, 13.00% and 12.50%, respectively.

Money Supply

The NBH does not use money supply targets as an instrument of monetary policy. The money supply flexibly adjusts to the money demand, which is indirectly influenced by monetary policy.

The following table provides information about the composition of the money supply as of the dates indicated:

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Table 19: Money Supply

​	As of December 31,										As of September 30, 2022
​	2017		2018		2019		2020		2021
​	(HUF billions)
M1(1)	​	19,360	​	21,971	​	24,531	​	30,264	​	34,915	​	34,258
M2(2)	​	22,405	​	25,212	​	27,610	​	33,496	​	38,870	​	42,245
M3(3)	​	22,928	​	25,637	​	27,724	​	33,563	​	39,017	​	42,595

Source: NBH

Notes:

(1)

Consists of currency in circulation outside monetary financial institutions plus overnight deposits.

(2)

Consists of M1 plus deposits with fixed terms of up to two years.

(3)

Consists of M2 plus repos, money market funds and debt securities with maturities of up to two years.

Recent Developments in Monetary Policy

On September 16, 2022, the NBH announced that from October 1, 2022, the reserve requirement of credit institutions would increase from 1% to a minimum of 5%, and may be further increased up to 10% based on individual bank decisions. In addition to the monthly average reserve requirement for the chosen reserve ratio, the NBH announced that it would also require banks to ensure that the balance of their reserve accounts does not fall below 5% on a daily basis.

The NBH also announced that it would begin providing a long-term deposit facility with a variable rate starting in October 2022, with the aim of absorbing liquidity for longer periods than one week.

On September 27, 2022, the NBH announced that effective as of September 28, 2022, the central bank base rate was raised by 125 basis points to 13.00%; the overnight deposit rate was increased by 125 basis points to 12.50% and the overnight and the one-week collateralized lending rates were each increased by 125 basis points to 15.50%. The Monetary Council also announced that interest rate conditions had become sufficiently strict, and therefore, the Monetary Council would pause the cycle of base rate hikes.

Beginning October 1, 2022, the NBH began to significantly reduce forint liquidity by raising the required reserve ratio, holding central bank discount bond auctions regularly and launching a longer-term deposit instrument. In addition, the NBH also increased the effectiveness of monetary transmission through increases in swap yields using daily tenders providing foreign currency liquidity.

On October 3, 2022, the NBH announced that the Financial Stability Board of the NBH decided to leave the countercyclical capital buffer rate unchanged at 0.5% through October 1, 2023.

On October 14, 2022, the NBH announced that effective as of October 14, 2022, the overnight collateralized lending rate would be raised by 950 basis points to 25.00%. The overnight deposit rate and the central bank base rates remained unchanged.

In addition, the Monetary Council announced that from October 14, 2022, the NBH would commence one-day (T/N) foreign exchange swap instrument and overnight (O/N) deposit quick tenders on a daily basis at higher interest rate levels than before. In addition, the NBH committed to directly meeting major foreign currency liquidity needs arising from covering energy imports in the coming months.

On October 14, 2022, the overnight deposit quick tender was announced with a yield of 18.00%.

On November 22, 2022, the Monetary Council announced that the NBH would hold a two-month deposit tender at the end of November 2022 to reduce banking sector liquidity over a longer term. Furthermore, beginning in December 2022, the NBH plans to hold FX swap tenders providing euro liquidity and discount bill auctions with maturities extending beyond the end of 2022.

20

Exchange Rate Development

In the ten-month period ended October 31, 2022, the foreign exchange rate of the forint weakened versus the euro, partly as a result of the Russia — Ukraine conflict. On October 31, 2022, the HUF/EUR exchange rate was HUF412.01/EUR1.00 and the HUF/USD exchange rate was HUF414.46 = USD1.00.

The Hungarian Banking System

Structure of the Hungarian Banking System

The following table illustrates certain trends in the Hungarian banking system for the periods indicated:

Table 20: Banking System — Selected Indicators

​	As of December 31										As of September 30, 2022
​	2017		2018		2019		2020		2021
​	(HUF billions)
Loans to non-financial corporations	​	6,496	​	7,448	​	8,286	​	9,352	​	10,375	​	12,037
Loans to other financial intermediaries	​	1,068	​	1,236	​	1,409	​	1,619	​	1,734	​	1,925
Loans to insurance corporations and pension funds	​	0	​	0	​	0	​	0	​	4	​	4
Loans to government	​	455	​	519	​	736	​	1,300	​	528	​	1,458
Loans to households	​	5,812	​	6,150	​	7,109	​	8,114	​	9,329	​	9,829
Loans to non-profit institutions	​	19	​	18	​	15	​	18	​	20	​	17

Source: NBH

Public Finance

General Information

The public finance sector in Hungary consists of the central government budget, social security funds (pension and health funds), extra-budgetary funds and local government budgets, which together are referred to as the general government budget.

Methodology

The fiscal year for the Government is the calendar year. The general government budget data are compiled in several stages by the Ministry of Finance (prior to May 2018, the Ministry for National Economy had this responsibility). In the fall of each calendar year, the Ministry of Finance is required to compile the first preliminary budget (called the “planned budget”) for the following calendar year in accordance with the budget act approved by Parliament for that year.

In January of each given calendar year, the Ministry of Finance compiles the first version of the general government budget for the previous year. This budget (compiled according to data available in January) is called the “preliminary budget.” During the course of the year, the Ministry of Finance collects additional information concerning the revenues and expenditures related to the previous year. In light of this additional information, the Ministry of Finance revises the preliminary budget (compiled in January) and compiles the second version of the general government budget for the previous year. This budget (compiled according to data available in May of a given calendar year) is called the “fact budget.” The main reason for the differences between the preliminary and fact budgets is the uncertainty in the exact amounts of revenues and expenditures of the central governmental institutions, as the balance sheets of these institutions are not compiled until May of a given calendar year. The Ministry of Finance is obligated to compile the final account by the end of August of a given calendar year using the fact budget. The final account is submitted to Parliament, and Parliament approves the final account by a simple majority vote. However, the

21

final account submitted to Parliament may differ from the final account approved by Parliament due to amendments. After the final account is approved by Parliament, the Ministry of Finance compiles the third version of the general government budget for the previous year, known as the “final budget.” During the course of the year in light of intra-year information, the Ministry of Finance compiles on an ad hoc basis budgets containing the expected revenues and expenditures on a best efforts basis. This budget is the “expected budget”.

The information included in this document with respect to the budgets for 2017, 2018, 2019, 2020 (final), 2021 (preliminary) and 2022 (planned budget and expected budget) was derived from the budgets for 2017, 2018, 2019, 2020, 2021 and 2022 as calculated by the Ministry of Finance using data available in October 2022.

Budget Trends

The following table sets forth the main fiscal trends in Hungary for the years indicated:

Table 21: General Budget Balance, consolidated(1)

​

For the year ended December 31,

​

2017 Final

2018 Final

2019 Final

2020 Final

2021 Preliminary

2022 Planned

2022 Expected

​

(HUF billions)

GFS method(2)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revenues

​

17,344.2

​

18,459.2

​

20,270.2

​

20,671.8

​

22,091.5

​

22,018.4

​

23,929.6

Expenditures

​

18,662.6

​

19,664.7

​

21,477.9

​

26,108.3

​

26,816.3

​

25,330.9

​

28,044.6

Balance

​

(1,318.5)

​

(1,205.6)

​

(1,207.7)

​

(5,436.4)

​

(4,724.8)

​

(3,312.6)

​

(4,115.1)

Balance in % of GDP

​

(3.4)

​

(2.8)

​

(2.5)

​

(11.2)

​

(8.6)

​

(5.9)

​

(6.5)

ESA method

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revenues

​

17,382.5

​

19,107.1

​

20,938.2

​

21,081.7

​

22,752.9

​

23,832.1

​

27,088.4

Expenditures

​

18,348.3

​

20,023.5

​

21,951.4

​

24,730.1

​

26,690.9

​

27,157.4

​

30,961.0

Balance

​

(965.8)

​

(916.5)

​

(968.2)

​

(3,648.4)

​

(3,938.0)

​

(3,325.3)

​

(3,872.5)

Balance in % of GDP

​

(2.5)

​

(2.1)

​

(2.0)

​

(7.5)

​

(7.1)

​

(5.9)

​

(6.1)

Sources: HCSO and Ministry of Finance

Note:

(1)

For methodological remarks on planned, expected, preliminary, fact and final budgets see “Public Finance — Methodology.”

(2)

Excluding privatization receipts.

According to data available in October 2022, the general government deficit (local governments included) amounted to HUF4,724.8 billion (8.6% of GDP) for the year 2021, according to the GFS methodology. The general government deficit for the year 2021 (local governments included), according to the ESA methodology, was HUF3,938.0 billion, equaling 7.1% of GDP for the year 2021.

According to the planned budget, the 2022 general government deficit (local governments included) was planned to be HUF3,312.6 billion (5.9% of GDP) according to the GFS methodology. The 2022 general government deficit (local governments included) was planned to be HUF3,325.3 billion (5.9% of GDP) according to the ESA methodology.

According to the expected budget, the 2022 general government deficit (local governments included) is expected to be HUF4,115.1 billion (6.5% of GDP) according to the GFS methodology. The 2022 general government deficit (local governments included) is expected to be HUF3,872.5 billion (6.1% of GDP) according to the ESA methodology.

22

In 2017, total general government revenues amounted to HUF17,344.2 billion. In 2018, 2019 and 2020, total general government revenues increased by 6.4% 9.8% and 2.0%, respectively, reaching HUF18,459.2 billion, HUF20,270.2 billion and HUF20,671.8 billion, respectively. In 2021, total general government revenues increased by 6.9%, reaching HUF22,091.5 billion. According to the planned budget, total general government revenues were planned to reach HUF22,018.4 billion in 2022, a decrease of 0.3% compared to the previous year. According to the expected budget, total general government revenues are expected to reach HUF23,929.6 billion in 2022, an increase of 8.3% compared to the previous year.

In 2017, total general government expenditures amounted to HUF18,662.6 billion. Total general government expenditures reached HUF19,664.7 billion in 2018, HUF21,477.9 billion in 2019, and HUF26,108.3 billion in 2020, an increase of 5.4%, 9.2%, and 21.6%, respectively, compared to the previous year. In 2021, total general government expenditures increased by 2.7% reaching HUF26,816.3 billion. According to the planned budget, total general government expenditures were planned to reach HUF25,330.9 billion in 2022, a decrease of 5.5% compared to the previous year. According to the expected budget, total general government expenditures are expected to reach HUF28,044.6 billion in 2022, an increase of 4.6% compared to the previous year.

For a detailed description of revenues and expenditures of the general government budget see “Central Government Budget” — “Central Government Revenues and Expenditures”; “Social Security and Extra-Budgetary Funds”; and “Local Government Finance”.

Central Government Budget

The following table sets forth information concerning central government revenues and expenditures for the final budget for the years 2017, 2018, 2019 and 2020, the preliminary budget for 2021, and the planned and expected budget for 2022:

Table 22: Central Government Revenues and Expenditures(1)

​

For the year ended December 31.

​

2017 Final

2018 Final

2019 Final

2020 Final

2021 Preliminary

2022 Planned

2022 Expected

​

(HUF billions)

Revenues

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Payments of Economic Units

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Corporate taxes (including financial institutions)

​

680.0

​

440.1

​

329.9

​

470.1

​

635.3

​

643.5

​

980.0

Mining tax (DPTT)

​

28.8

​

43.7

​

45.6

​

30.7

​

60.2

​

38.0

​

199.9

Company car tax

​

33.3

​

35.3

​

36.4

​

37.8

​

39.4

​

39.3

​

49.6

Gambling tax

​

27.5

​

29.3

​

28.2

​

35.0

​

28.5

​

33.9

​

40.8

Eco tax

​

23.9

​

25.8

​

5.6

​

5.6

​

5.2

​

5.5

​

5.0

Simplified business tax

​

63.6

​

54.1

​

43.4

​

1.7

​

0.0

​

0.0

​

0.0

Tax of small enterprises

​

22.4

​

41.7

​

70.5

​

83.4

​

111.2

​

121.2

​

147.1

Itemized tax of small taxpayers

​

98.2

​

124.9

​

158.5

​

158.2

​

195.8

​

236.8

​

176.4

Tax on utility systems

​

55.0

​

54.3

​

54.5

​

52.5

​

54.1

​

53.4

​

53.4

Advertising tax

​

0.0

​

12.3

​

6.3

​

0.0

​

9.2

​

0.0

​

0.0

Other central payments

​

456.1

​

507.1

​

560.7

​

552.3

​

601.4

​

636.1

​

695.4

Other payments

​

18.0

​

9.5

​

18.1

​

15.8

​

11.6

​

15.0

​

(13.0)

Tax of financial institutions

​

64.2

​

53.3

​

56.7

​

120.5

​

61.5

​

60.9

​

329.3

Extra tax of certain sectors

​

1.1

​

0.7

​

0.1

​

47.6

​

78.6

​

76.3

​

169.4

Total

​

1,572.1

​

1,431.9

​

1,414.4

​

1,611.3

​

1,892.0

​

1,959.9

​

2,833.3

23

​

For the year ended December 31.

​

2017 Final

2018 Final

2019 Final

2020 Final

2021 Preliminary

2022 Planned

2022 Expected

​

(HUF billions)

Taxes on Consumption

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Value added tax

​

3,525.3

​

3,928.7

​

4,532.4

​

4,669.0

​

5,397.2

​

5,487.1

​

6,627.0

Excises

​

1,047.1

​

1,137.2

​

1,201.5

​

1,215.6

​

1,260.4

​

1,321.0

​

1,267.5

Financial transaction tax

​

217.3

​

233.2

​

243.4

​

217.8

​

233.1

​

232.5

​

287.1

Public health production tax(1)

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

Insurance tax

​

35.7

​

39.7

​

82.5

​

98.5

​

104.3

​

115.4

​

172.3

Telecom levy

​

53.6

​

53.8

​

53.5

​

56.7

​

58.7

​

53.3

​

96.6

Turism development contribution

​

0.0

​

19.0

​

26.9

​

9.9

​

0.4

​

33.5

​

37.8

Contribution of airlines

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

12.5

Total

​

4,878.9

​

5,411.7

​

6,140.1

​

6,267.5

​

7,054.0

​

7,242.8

​

8,500.8

Payments of Households

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gross PIT revenues

​

1,920.0

​

2,177.4

​

2,424.6

​

2,527.7

​

2,888.6

​

2,866.5

​

2,790.7

PIT revenues of central budget

​

1,920.0

​

2,177.4

​

2,424.6

​

2,527.7

​

2,888.6

​

2,866.5

​

2,790.7

Private persons’ special tax

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

98% extraordinary tax of private persons

​

1.0

​

0.4

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

Registration fee paid after domestic servants

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

Tax payments

​

6.9

​

8.6

​

7.8

​

6.8

​

3.2

​

0.0

​

0.1

Fees

​

173.6

​

191.0

​

215.6

​

207.2

​

224.0

​

198.7

​

256.3

Vehicle tax

​

45.8

​

47.9

​

50.4

​

85.3

​

95.0

​

90.5

​

96.9

Other Revenues

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

2,147.3

​

2,425.3

​

2,698.3

​

2,827.1

​

3,210.9

​

3,155.7

​

3,144.1

Central Budgetary Institutions and Chapter Administered Appropriations

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Own revenues of the institutions

​

2,389.9

​

2,228.9

​

2,002.7

​

2,354.6

​

2,220.8

​

1,510.6

​

2,390.6

Own revenues of chapter administered professional appropriations

​

433.8

​

122.0

​

140.8

​

337.8

​

475.3

​

235.0

​

315.0

EU support of chapter administered professional appropriations and central investments

​

1,124.2

​

85.4

​

107.6

​

105.9

​

4.0

​

0.0

​

0.0

Total

​

3,947.8

​

2,436.3

​

2,251.1

​

2,798.3

​

2,700.1

​

1,745.6

​

2,705.6

Payments of Central Budgetary Institutions

​

42.9

​

30.4

​

137.4

​

34.4

​

26.5

​

26.2

​

82.5

Payments to Central Carry-Over Fund

​

0.0

​

199.8

​

286.6

​

339.1

​

362.8

​

0.0

​

865.7

Contribution to National Social Fund

​

12.8

​

0.0

​

0.3

​

0.0

​

0.0

​

0.0

​

0.0

Payments of Local Governments

​

36.4

​

41.7

​

55.2

​

67.8

​

168.8

​

129.8

​

167.0

24

​

For the year ended December 31.

​

2017 Final

2018 Final

2019 Final

2020 Final

2021 Preliminary

2022 Planned

2022 Expected

​

(HUF billions)

Payments of Extrabudgetary and Social Security Funds

​

17.0

​

13.3

​

91.2

​

38.9

​

21.2

​

21.2

​

21.2

Revenues of International Transactions

​

0.0

​

0.0

​

1.6

​

0.0

​

​

​

​

​

​

Payments Related to State Property

​

265.5

​

184.6

​

217.5

​

293.6

​

213.6

​

275.8

​

434.2

Other Revenues

​

40.8

​

19.6

​

37.2

​

48.8

​

101.6

​

19.1

​

55.4

Revenues Related to Debt Service

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

Revenues from EU programs

​

0.0

​

1,053.8

​

1,251.4

​

1,681.1

​

1,552.6

​

2,363.3

​

1,416.7

Reimbursement of EU financial supports

​

100.4

​

260.9

​

211.4

​

1.9

​

0.0

​

0.0

​

0.0

Customs and import duties

​

12.2

​

15.7

​

16.0

​

15.9

​

23.4

​

22.4

​

34.5

Pension Reform and Debt Reduction Fund

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Revenue(1)

​

13,074.2

​

13,525.1

​

14,809.9

​

16,025.8

​

17,327.5

​

16,961.8

​

20,260.9

Interest Revenues

​

104.3

​

120.5

​

258.4

​

247.2

​

133.8

​

105.0

​

221.4

Total Revenues(2)

​

13,178.5

​

13,645.7

​

15,068.3

​

16,273.0

​

17,461.3

​

17,066.8

​

20,482.4

Expenditures

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Subsidiaries to Economic Units

​

326.3

​

383.1

​

421.2

​

663.4

​

642.9

​

479.4

​

1,296.9

Support to the Media

​

70.2

​

71.3

​

80.1

​

84.8

​

97.2

​

110.7

​

110.7

Consumer Price Subsidy

​

94.5

​

90.4

​

89.1

​

65.0

​

86.0

​

120.0

​

117.0

Housing Grants

​

184.7

​

193.2

​

191.2

​

251.5

​

376.5

​

381.8

​

593.6

Family Benefits Social Subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Family benefits

​

407.1

​

402.7

​

399.2

​

399.4

​

399.2

​

401.1

​

399.9

Income supplement benefits

​

124.4

​

122.2

​

137.4

​

142.0

​

152.3

​

162.3

​

178.5

Benefits under retirement age

​

94.7

​

92.9

​

92.5

​

92.9

​

99.2

​

97.1

​

116.1

Other specific subsidies

​

26.8

​

25.1

​

25.2

​

24.5

​

24.0

​

24.8

​

24.4

Total

​

653.0

​

642.8

​

654.3

​

658.9

​

674.7

​

685.3

​

718.9

Central Budgetary Institutions and Chapter Administered Appropriations

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Expenditures of central budgetary institutions

​

5,141.5

​

5,726.8

​

6,228.0

​

7,285.8

​

6,983.3

​

5,386.3

​

7,246.3

Chapter administered professional appropriations

​

5,116.6

​

4,691.7

​

4,896.2

​

7,072.8

​

4,374.5

​

3,322.4

​

4,442.6

Central investment

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

Chapter balance reserve

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

​

0.0

Total

​

10,258.1

​

10,418.5

​

11,124.2

​

14,358.5

​

11,357.8

​

8,708.7

​

11,688.9

Support to Political Parties and Other Civil Organizations

​

3.8

​

9.8

​

5.6

​

4.5

​

5.8

​

11.8

​

9.5

Transfer to Social Security Funds

​

623.9

​

591.6

​

467.6

​

652.0

​

1,409.2

​

1,785.3

​

1,951.9

Transfer to Local Governments

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Direct transfer from the budget

​

700.5

​

746.8

​

778.5

​

821.0

​

1,013.8

​

873.4

​

1,073.2

25

​	For the year ended December 31.
​	2017 Final		2018 Final		2019 Final		2020 Final		2021 Preliminary		2022 Planned		2022 Expected
​	(HUF billions)
Yielded PIT revenues	​	0.0	​	0.0	​	0.0	​	0.0	​	0.0	​	0.0	​	0.0
Total	​	700.5	​	746.8	​	778.5	​	821.0	​	1,013.8	​	873.4	​	1,073.2
Transfer to Extrabudgetary Funds	​	85.0	​	92.5	​	76.9	​	248.5	​	115.4	​	150.0	​	157.8
EU programs expenditures	​	​	​	​	​	​	​	​	​	2,243.1	​	3,001.2	​	3,190.6
Expenditures of International Transactions	​	4.0	​	2.8	​	6.1	​	10.8	​	11.9	​	16.8	​	12.9
Debt Service Related Expenditures	​	50.3	​	32.4	​	38.7	​	44.5	​	52.3	​	43.4	​	41.6
Other Expenditures	​	63.6	​	60.3	​	67.2	​	120.3	​	197.2	​	153.1	​	192.0
Reserves	​	0.0	​	0.0	​	0.0	​	0.0	​	0.0	​	893.7	​	0.0
Cash compensation	​	3.1	​	2.8	​	2.5	​	2.2	​	1.9	​	1.8	​	1.8
Government Guarantees Redeemed	​	17.9	​	12.5	​	14.8	​	14.0	​	16.8	​	47.0	​	23.4
Contribution to EU Budget	​	260.4	​	316.5	​	365.3	​	449.8	​	610.5	​	564.9	​	586.7
Expenditures Related to State Property	​	451.0	​	305.6	​	517.1	​	1,311.7	​	1,474.1	​	800.1	​	844.5
Interest Payments	​	1,091.3	​	1,048.4	​	1,100.5	​	1,227.7	​	1,408.1	​	1,369.6	​	1,928.0
Total Expenditures	​	14,941.5	​	15,021.2	​	16,000.8	​	20,988.9	​	21,795.3	​	20,198.1	​	24,540.0

Source: Ministry of Finance

Notes: — 

(1)

Excluding interest revenues

(2)

Including interest revenues

Social Security and Extra-Budgetary Funds

The social security funds consist of two funds: the pension fund and the health fund. The following table sets forth the revenues and expenditures for social security and certain extra-budgetary funds:

Table 23: Social Security and Extra-Budgetary Funds, Revenues and Expenditures(1)

​

For the Year ended December 31,

​

2017 Final

2018 Final

2019 Final

2020 Final

2021 Preliminary

2022 Planned

2022 Expected

​

(HUF billions)

Social Security Funds

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revenues

​

5,325.2

​

5,702.9

​

5,815.8

​

5,889.7

​

6,950.8

​

7,623.7

​

8,112.5

Expenditures

​

5,468.1

​

5,786.5

​

6,050.7

​

6,541.8

​

7,370.7

​

7,770.5

​

8,609.1

Surplus (deficit)

​

(142.9)

​

(83.7)

​

(234.9)

​

(642.1)

​

(420.0)

​

(146.8)

​

(469.7)

Extra Budgetary Funds(2)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revenues

​

719.6

​

574.0

​

658.2

​

848.1

​

689.8

​

703.3

​

775.9

Expenditures

​

647.1

​

566.4

​

618.7

​

801.4

​

709.8

​

577.9

​

571.7

Surplus (deficit)

​

72.5

​

7.6

​

39.5

​

46.7

​

(20.0)

​

125.4

​

204.2

Source: Ministry of Finance

26

Notes:

(1)

For methodological remarks on planned, expected, preliminary, fact and final budgets, see “Public Finance — Methodology.”

(2)

Currently, these funds consist of the Nuclear Fund, the National Employment Fund, the Research and Development Fund, the National Cultural Fund, and the Bethlen Gábor Fund.

The contribution of the central government to the social security funds was HUF623.9 billion in 2017, HUF591.6 billion in 2018, HUF467.6 billion in 2019, HUF652.0 billion in 2020, and HUF1,409.2 in 2021. The contribution of the central government to the social security funds was planned to be HUF1,785.3 billion in 2022 according to the planned budget. The contribution of the central government to the social security funds is expected to be HUF1,951.9 billion in 2022 according to the expected budget.

Local Government Finance

The following table sets forth the revenues and expenditures at the local government level for the years indicated for all the local governments:

Table 24: Local Government Revenues and Expenditures

​

For the Year ended December 31.

​

2017 Final

2018 Final

2019 Final

2020 Final

2021 Preliminary

2022 Planned

2022 Expected

​

(HUF billions)

Revenues

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Own revenues

​

1,170.7

​

1,298.7

​

1,405.1

​

1,251.0

​

1,315.5

​

1,422.7

​

1,440.8

Subsidies

​

700.5

​

746.8

​

778.5

​

821.0

​

1,013.8

​

873.4

​

1,073.2

Other revenues

​

1,138.0

​

931.3

​

894.5

​

873.2

​

953.9

​

921.2

​

1,263.2

Total revenues, GFS (excluding privatization)

​

3,009.2

​

2,976.8

​

3,078.1

​

2,945.2

​

3,308.4

​

3,217.3

​

3,750.2

Privatization revenues

​

4.0

​

3.4

​

3.5

​

13.9

​

3.1

​

3.5

​

3.5

Total revenues (including privatization)

​

3,013.2

​

2,980.2

​

3,081.6

​

2,959.1

​

3,311.5

​

3,220.8

​

3,753.7

Expenditures

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Wages

​

861.0

​

900.0

​

959.4

​

971.1

​

1,012.4

​

986.2

​

1,088.8

Investments

​

559.6

​

696.8

​

913.3

​

865.2

​

843.5

​

1,040.1

​

966.2

Other expenditures

​

1,073.6

​

1,133.9

​

1,285.2

​

1,234.0

​

1,403.4

​

1,350.9

​

1,460.2

Total expenditures

​

2,494.2

​

2,730.7

​

3,157.9

​

3,070.3

​

3,259.3

​

3,377.2

​

3,515.2

Surplus (deficit), GFS (excluding privatization)

​

516.0

​

246.1

​

(79.8)

​

(125.1)

​

49.1

​

(159.9)

​

235.0

Surplus (deficit) (including privatization)

​

518.9

​

249.5

​

(76.3)

​

(111.2)

​

52.2

​

(156.4)

​

238.5

Source: Ministry of Finance

The municipalities are to a large extent autonomous, according to the Hungarian Constitution and the Local Government Act. However, the Government must take the local government deficit into account when preparing and implementing the central government budget and other parts of the public budget over which the Government and Parliament have more direct control. Parliament can, nevertheless, influence the financial situation of local governments through the volume of budget grants (transfers) and the tax-sharing system. The debt management and debt financing of municipalities was restricted as of January 1, 2012. See “Political System — Local Government.” During 2021, the revenues of the local governments amounted

27

to HUF3,308.4 billion, the expenditures of local governments amounted to HUF3,259.3 billion, and the fiscal balance of the local governments, excluding proceeds from privatizations, amounted to a surplus of HUF49.1 billion.

Recent Developments in Public Finance

On October 14, 2022, the Government announced that Hungary’s oil reserves could be replenished before the end of 2022. In August 2022, the Government approved the release of 184 million liters of diesel from strategic reserves with a view to ensuring domestic fuel supply. A significant portion of the diesel stock released from Hungary’s strategic reserves could be returned to the reserves before the end of the year following a government decision to purchase almost 50 million liters of diesel. The freed-up reserves account for 38% of the diesel and 24% of the total diesel and crude stock. Under current regulations, the strategic reserves have to be replenished by April 1, 2023. To this end, the Hungarian Association for the Stockpiling of Hydrocarbons (MSZKSZ) has initiated a tender under which 47.8 million liters of diesel could be procured before the end of the year. The remainder of the released stock will be returned to the strategic reserve under further tenders.

On October 17, 2022, the Government announced the extension of the temporary freeze on mortgage loan interest rates until June 30, 2023.

On October 24, 2022, the Government announced the extension of the freeze on interest rates for loans to small and medium-sized firms from November 15, 2022 until July 2023. Interest rates will be frozen retroactively at their June 28, 2022 levels, which was 7.77%.

On November 10, 2022, the Government announced that (i) until December 31, 2022, the prices of fresh eggs and potatoes sold in shops, delivery services and supermarkets would be capped at the retail price level of those products on September 30, 2022; and (ii) the central government budget (excluding local governments) posted a surplus of HUF101.3 billion in October 2022. As of and for the ten-month period ended October 31, 2022, the central government deficit (excluding local governments) amounted to HUF2,683.9 billion

On November 22, 2022, the Government announced that it would expand the household utility price caps to state and local council-owned rental apartment buildings, with retroactive effect from August 1, 2022.

On November 23, 2022, the Government announced that Hungary’s gas storage facilities were 86% full as of November 15, 2022.

Developments Related to EU Funding and the Rule of Law

On September 26, 2022, the Government submitted a second package of bills to Parliament related to the EU’s conditionality procedure. The package contains amendments to legislation regarding oversight of the use of EU funding with the aim of reaching an agreement with the European Commission. The proposed legislation would establish an Integrity Authority and an Anti-Corruption Task Force.

The Integrity Authority would be a state administrative body, autonomous of the Government, focused on investigating fraud, conflict of interest, corruption and other crimes in connection with the use of EU funds in Hungary. The Integrity Authority would be headed by a chairman and two deputies, appointed by Hungary’s president on the recommendation of the head of the State Audit Office for a single term of six years. The Integrity Authority’s board would be required to report on the body’s activities once a year to both the Hungarian Parliament and to the European Commission.

The Anti-Corruption Task Force, whose members would include representatives from anti-corruption non-governmental organizations (“NGOs”) and state institutions, would work alongside the Integrity Authority, undertaking analyses, making recommendations, issuing opinions and drafting decisions. The Anti-Corruption Task Force would be headed by the chairman of the Integrity Authority, but its deputy would be picked by the body’s NGO members. Other participants could be invited to contribute to the Anti-Corruption Task Force on a permanent or ad hoc basis.

28

The proposed legislation would set up a three-member committee to support independent, objective decisions on the selection of people involved with the operation of the Integrity Authority and the Anti-Corruption Task Force and establish the rules for operation of an Internal Oversight and Integrity Directorate, which would report on its activities once a year to the Integrity Authority.

On October 4, 2022, Parliament passed a law creating the Integrity Authority, which is expected to start operating in the second half of November 2022.

On November 23, 2022, the Government announced that Parliament approved an amendment to the Directorate General for the Audit of European Union Funds (EUTAF) along with bills aimed at bringing the EU’s conditionality procedure to a conclusion. Under the amendments, the EUTAF will become an autonomous state administrative body with the aim of creating a system that allows for more effective oversight of EU funds.

National Debt

Public Debt

The following table sets out certain statistics regarding Hungarian public debt for the years indicated:

Table 25: Public Debt of Hungary(1)

​	As of and for the year ended December 31,
​	2017		2018		2019		2020		2021(2)
​	(HUF billions, except for percentages)
Internal Public Debt	​	20,689.4	​	22,796.0	​	24,357.1	​	29,237.3	​	32,121.2
% of Nominal GDP	​	52.7%	​	52.5%	​	51.1%	​	60.4%	​	58.3%
External Public Debt	​	5,782.5	​	5,724.8	​	5,121.2	​	7,318.2	​	8,395.2
% of Nominal GDP	​	14.7%	​	13.2%	​	10.7%	​	15.1%	​	15.2%
Other Liabilities	​	274.2	​	167.4	​	203.7	​	128.8	​	180.6
Total Public Debt	​	26,746.2	​	28,688.2	​	29,682.0	​	36,684.3	​	40,697.0
% of Nominal GDP	​	68.1%	​	66.1%	​	62.3%	​	75.8%	​	73.8%
Nominal GDP	​	39,274.8	​	43,386.4	​	47,664.9	​	48,411.5	​	55,125.6

Source: GDMA Pte Ltd.

Notes:

(1)

This table shows the public debt of Hungary from the perspective of the economic obligations of the central government. Financial derivatives and mark-to-market deposits from 2005 are included. In this table, external debt refers to government obligations denominated in foreign currency, while internal debt refers to obligations denominated in local currency.

(2)

Data as available at the end of October 2022.

The government debt to GDP ratio amounted to 68.1% in 2017. In 2018 and 2019 the ratio decreased to 66.1% and 62.3%, respectively. In 2020, the ratio grew to 75.8%. In 2021, the ratio decreased to 73.8%.

The following table sets forth the investor base of Hungarian government securities (including securities denominated in foreign currency, securities denominated in local currency with original maturity over 1 year and securities denominated in local currency with original maturity not exceeding 1 year) for the dates indicated:

29

Table 26: Investor Base of Hungarian Government Securities (including foreign currency debt securities)

​	As of December 31,										As of September 30, 2022
​	2017		2018		2019		2020		2021
​	(HUF billions)
Nonfinancial corporations	​	335.1	​	354.8	​	294.1	​	214.7	​	379.0	​	345.0
Central Bank	​	74.0	​	39.2	​	39.2	​	1,141.9	​	2,818.2	​	1,973.9
Credit institutions	​	8,612.8	​	8,467.5	​	8,366.0	​	10,405.7	​	9,631.4	​	9,594.7
Money market funds	​	68.7	​	80.9	​	22.7	​	13.1	​	8.8	​	14.0
Other monetary financial institutions	​	8,681.5	​	8,548.4	​	8,388.7	​	10,418.8	​	9,640.2	​	9,608.7
Other financial intermediaries	​	1,317.1	​	1,341.0	​	928.3	​	907.3	​	753.4	​	944.1
Financial auxiliaries	​	100.2	​	101.1	​	113.5	​	136.8	​	141.3	​	154.1
Insurance corporations and pension funds	​	2,291.9	​	2,371.7	​	2,428.3	​	2,626.3	​	2,384.9	​	1,999.5
Financial corporations	​	12,464.7	​	12,401.4	​	11,898.0	​	15,231.1	​	15,738.1	​	14,680.3
Central Government	​	259.9	​	252.2	​	249.7	​	253.6	​	524.0	​	311.8
Local government	​	264.0	​	284.9	​	292.5	​	203.4	​	144.7	​	149.8
Social security funds	​	0.0	​	0.0	​	0.0	​	0.0	​	0.0	​	0.0
General government	​	523.9	​	537.1	​	542.2	​	457.0	​	668.7	​	461.6
Households	​	5,024.9	​	5,778.7	​	8,047.1	​	9,135.6	​	10,110.0	​	9,729.0
Nonprofit institutions serving households	​	189.0	​	258.1	​	149.4	​	104.3	​	100.9	​	111.6
Rest of the world	​	9,220.3	​	9,336.8	​	9,458.5	​	10,994.9	​	10,598.6	​	9,933.3
Total	​	27,757.9	​	28,666.9	​	30,389.3	​	36,137.7	​	37,595.4	​	35,260.9

Source: NBH

The following table sets forth the investor base of Hungarian government securities denominated in local currency (including securities denominated in local currency with original maturity over 1 year and securities denominated in local currency with original maturity not exceeding 1 year) for the dates indicated:

Table 27: Investor Base of Hungarian Local-Currency Government Securities

​	As of December 31,										As of September 30, 2022
​	2017		2018		2019		2020		2021
​	(HUF billions)
Nonfinancial corporations	​	302.7	​	328.4	​	281.0	​	200.2	​	359.9	​	287.8
Central Bank	​	47.2	​	39.2	​	39.2	​	1,141.9	​	2,818.2	​	1,973.9
Credit institutions	​	8,157.5	​	8,141.1	​	8,071.1	​	10,144.9	​	9,149.0	​	9,027.1
Money market funds	​	59.8	​	69.1	​	20.3	​	13.1	​	8.8	​	8.9
Other monetary financial institutions	​	8,217.3	​	8,210.2	​	8,091.4	​	10,158.0	​	9,157.8	​	9,035.9
Other financial intermediaries	​	1,180.6	​	1,175.3	​	824.1	​	766.6	​	663.3	​	866.4
Financial auxiliaries	​	98.6	​	99.8	​	112.1	​	135.2	​	140.1	​	153.2
Insurance corporations and pension funds	​	2,266.4	​	2,350.6	​	2,410.9	​	2,591.9	​	2,351.7	​	1,965.9
Financial corporations	​	11,810.2	​	11,875.1	​	11,477.7	​	14,793.6	​	15,131.0	​	13,995.2

30

​	As of December 31,										As of September 30, 2022
​	2017		2018		2019		2020		2021
​	(HUF billions)
Central government	​	259.9	​	252.2	​	249.7	​	252.9	​	523.3	​	311.0
Local government	​	263.5	​	284.9	​	292.5	​	203.4	​	144.7	​	149.8
Social security funds	​	0.0	​	0.0	​	0.0	​	0.0	​	0.0	​	0.0
General government	​	523.3	​	537.1	​	542.2	​	456.3	​	668.0	​	460.8
Households	​	4,870.9	​	5,604.2	​	7,848.3	​	8,908.6	​	9,840.8	​	9,271.1
Nonprofit institutions serving households	​	186.6	​	254.2	​	145.0	​	100.0	​	96.7	​	105.8
Rest of the world	​	3,857.2	​	4,181.1	​	4,622.7	​	4,702.6	​	3,607.2	​	2,871.7
Total	​	21,550.9	​	22,780.1	​	24,916.8	​	29,161.3	​	29,703.6	​	26,992.4

Source: NBH

The Maastricht measure of general government debt is defined as the sector’s consolidated gross debt at nominal value, excluding other liabilities. The following table sets forth the general government consolidated gross debt at nominal value as a percent of GDP for the years indicated:

Table 28: Maastricht Debt of Hungary(1)

​	As of December 31,
​	2017		2018		2019		2020		2021
​	(Percent of GDP)
Maastricht debt	​	72.1%	​	69.1%	​	65.3%	​	79.3%	​	76.8%

Source: NBH

Notes:

(1)

Gross debt, including Eximbank

According to data published by the NBH, general government consolidated gross debt at nominal value (Maastricht debt) including Eximbank as of December 31, 2021, amounted to HUF42,352 billion, equaling 76.8% of GDP.

According to data compiled by Eurostat, the government debt to GDP ratio in the European Union amounted to 87.9% as of December 31, 2021.

The following table sets forth the maturity breakdown of Hungary’s medium and long-term external debt by sectors (excluding SPEs) as of June 30, 2022:

31

Table 29: Schedule of Payments on External Public Debt as of June 30, 2022

​	Total
​	​	​	Central Bank and General Government										Other Monetary Financial Institutions and Other Sectors												​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	Other Monetary Financial Institutions						Other Sectors						​	​	​	​
​	​	​	Total		Central Bank		General Government		of which HUF denominated bonds		Total		Total		Deposit Taking Corporations except the Central Bank		Money Market Funds		Total		Financial Corporations other than Monetary Financial Institutions		Non- financial Corporations, Households, and Non- profit Institutions Serving Households		Public Sector(1)		Private Sector(2)
​	(EUR million)
2022. Q3	​	795.7	​	342.4	​	1.0	​	341.4	​	216.5	​	453.3	​	111.2	​	111.2	​	0.0	​	342.1	​	141.8	​	200.3	​	366.3	​	429.4
2022. Q4	​	719.0	​	296.0	​	1.0	​	295.0	​	251.4	​	423.0	​	71.6	​	71.6	​	0.0	​	351.3	​	83.6	​	267.7	​	328.0	​	390.9
2022	​	1,514.6	​	638.4	​	2.0	​	636.4	​	467.9	​	876.2	​	182.8	​	182.8	​	0.0	​	693.4	​	225.4	​	468.0	​	694.3	​	820.3
2023. Q1	​	1,376.3	​	884.9	​	1.0	​	883.9	​	64.8	​	491.4	​	199.1	​	199.1	​	0.0	​	292.3	​	55.7	​	236.7	​	999.9	​	376.5
2023. Q2	​	1,062.2	​	26.9	​	1.0	​	25.9	​	9.1	​	1,035.3	​	218.7	​	218.7	​	0.0	​	816.7	​	59.1	​	757.6	​	190.4	​	871.8
2023. Q3	​	2,410.0	​	571.8	​	0.0	​	571.8	​	258.6	​	1,838.2	​	1,423.6	​	1,423.6	​	0.0	​	414.6	​	48.3	​	366.3	​	591.9	​	1,818.1
2023. Q4	​	3,698.8	​	1,416.2	​	0.0	​	1,416.2	​	309.5	​	2,282.7	​	2,004.4	​	2,004.4	​	0.0	​	278.3	​	58.9	​	219.4	​	1,695.9	​	2,003.0
2023	​	8,547.4	​	2,899.8	​	2.0	​	2,897.8	​	642.0	​	5,647.6	​	3,845.7	​	3,845.7	​	0.0	​	1,801.9	​	221.9	​	1,580.0	​	3,478.1	​	5,069.4
2024	​	11,053.2	​	5,748.2	​	2,752.7	​	2,995.5	​	1,126.8	​	5,305.0	​	2,645.7	​	2,645.7	​	0.0	​	2,659.3	​	473.6	​	2,185.7	​	6,108.6	​	4,944.6
2025	​	6,379.2	​	2,444.7	​	0.0	​	2,444.7	​	1,449.0	​	3,934.5	​	1,886.4	​	1,886.4	​	0.0	​	2,048.0	​	107.3	​	1,940.7	​	2,661.9	​	3,717.3
2026	​	5,452.4	​	2,324.9	​	0.0	​	2,324.9	​	1,162.4	​	3,127.5	​	1,806.4	​	1,806.4	​	0.0	​	1,321.1	​	77.2	​	1,244.0	​	2,565.6	​	2,886.8
2027	​	7,741.0	​	4,757.0	​	0.0	​	4,757.0	​	2,982.5	​	2,984.0	​	409.9	​	409.9	​	0.0	​	2,574.1	​	45.4	​	2,528.7	​	4,817.2	​	2,923.8
2028	​	3,135.7	​	1,929.9	​	0.0	​	1,929.9	​	704.7	​	1,205.8	​	417.8	​	417.8	​	0.0	​	787.9	​	23.7	​	764.2	​	1,966.4	​	1,169.3
2029	​	3,172.4	​	2,340.6	​	0.0	​	2,340.6	​	369.3	​	831.8	​	430.1	​	430.1	​	0.0	​	401.7	​	21.0	​	380.7	​	2,376.9	​	795.5
2030	​	3,320.1	​	2,528.7	​	0.0	​	2,528.7	​	1,310.4	​	791.4	​	458.8	​	458.8	​	0.0	​	332.6	​	11.1	​	321.5	​	2,789.8	​	530.3
2031	​	3,431.7	​	2,976.7	​	0.0	​	2,976.7	​	1,004.4	​	455.0	​	162.9	​	162.9	​	0.0	​	292.1	​	21.8	​	270.3	​	3,003.4	​	428.3
2032	​	2,672.5	​	1,182.2	​	0.0	​	1,182.2	​	455.8	​	1,490.3	​	76.8	​	76.8	​	0.0	​	1,413.5	​	16.8	​	1,396.7	​	1,202.5	​	1,470.0
2033	​	1,482.9	​	1,187.5	​	0.0	​	1,187.5	​	663.6	​	295.4	​	0.6	​	0.6	​	0.0	​	294.9	​	7.4	​	287.5	​	1,206.2	​	276.7
After	​	11,330.4	​	10,635.8	​	3,638.8	​	6,997.0	​	907.1	​	694.6	​	151.6	​	151.6	​	0.0	​	543.0	​	110.2	​	432.8	​	10,667.7	​	662.7
Total	​	69,233.6	​	41,594.5	​	6,395.5	​	35,199.0	​	13,245.9	​	27,639.1	​	12,475.5	​	12,475.5	​	0.0	​	15,163.6	​	1,363.0	​	13,800.7	​	43,538.6	​	25,695.0

32

Source: NBH

Note:

(1)

Including (i) central bank, (ii) general government and (iii) central government controlled and local government controlled public corporations included in other monetary financial institutions and other sectors.

(2)

Including (i) non-public corporations included in other monetary financial institutions and (ii) other sectors.

Government Obligations to the NBH

The following table shows the Government’s obligations to the NBH, as of December 31 for the years indicated, and as of September 30, 2022:

Table 30: Government Obligations to the NBH

​	As of December 31,										As of September 30, 2022
​	2017		2018		2019		2020		2021
​	(HUF billions)
Loans	​	0.0	​	0.0	​	0.0	​	0.0	​	0.0	​	0.0
Securities	​	39.2	​	39.2	​	39.2	​	1,113.6	​	3,302.8	​	3,313.2

Source: NBH

Gross External Debt

The following table sets forth the distribution and maturity of gross external debt of Hungary as of December 31, 2021:

Table 31: Gross External Debt(1)

​	As of December 31, 2021
​	Amount of Debt		of which short-term
​	(EUR millions)
Obligor	​	​	​	​
NBH	​	16,715.0	​	10,491.4
Banking Sector(2)	​	15,618.1	​	4,388.1
General Government	​	38,167.8	​	555.9
Other Sectors(2)	​	23,091.8	​	8,500.0
Total(2)	​	93,592.7	​	23,935.4
Direct Investments Debt Instruments	​	36,503.8	​	—

Source: NBH

Notes:

(1)

In this table, external debt refers to obligations owed to non-resident entities. External debt as defined in External Debt Statistics: Guide for Compilers and Users (IMF 2003).

(2)

Financial derivatives are not included.

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