The current account surplus amounted to EUR 461.5mn, according to the monthly balance of payments data of the National Bank of Hungary (NBH). The surplus increased by 6.8% y/y but the base-period data has been subject to revisions. There was a solid increase of the external goods trade balance while the net services balance deteriorated due both to travel and other services. Profit repatriation by foreign investors increased y/y but this was compensated by lower outflows of portfolio investment yields.
The y/y increase in the current account surplus was despite a reduction in the net EU fund flows under the current account. Net EU fund current inflows amounted to EUR35.4m compared to EUR172.5bn in Aug 2015. On the other hand, net EU fund inflows under the capital account increased considerably, in line with the earlier data on the budget execution for the month. As we reported, the economy ministry had explained that the high EU fund revenues related to the previous program period so they were not an indication of rising absorption.
There were net EUR810.2mn of net financial account outflows in August, excluding the decline in reserve assets. The outflows mostly represented local banks placing deposits abroad and non-residents pulling deposits out of the domestic banking system.