Cheap central bank loans drive Hungary’s growth in 2015

January 6, 2016


The “Growth Loan Program” (NHP) underwritten by the National Bank of Hungary (MNB) resulted in HUF 2.126 trillion being lent to some 31,000 Hungarian enterprises between July 2013 and December 2015, central bank governor György Matolcsy announced on Wednesday.

Matolcsy credited the NHP with reversing the annual 5-7 percent decrease in bank lending and actually bringing about a 3.5 percent increase in lending by the third quarter of 2015.   He further credits the program with boosting Hungary’s economic growth 1-1.5 percent in 2014 and 2015.

The economy grew 2.8-2.9 percent in 2015.  If Matolcsy is to be believed, then over half this growth can be attributed to the NHP program.

Experts believe companies mostly used the program to refinance loans denominated in foreign currencies.

It remains to be seen how much, if any, of the HUF 2.126 trillion is ever repaid.

Daily online reports that Matolcsy’s son, Ádám Matolcsy, was among the lucky recipients of a low-interest loan underwritten by the National Bank of Hungary.  His company, Glamorous (registered capital: HUF 16 million), got a HUF 405 million loan with which to purchase the Balaton Furniture factory (registered capital: HUF 350 million).