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Hungary has high levels of debt relative to the GDP. The currency exposure has been reduced somewhat, but short-term debt remains high. The foreign currency indebtedness of the population has been one of the most serious problems in recent years. The conversion of these loans into HUF brought some relief. Interest rates are now lower than have been for many years and inflation is low. The disposable income and savings of the population are not growing.


Household credit crisis

Getting disentangled from the foreign currency debt crisis has been slow and painful process for Hungarian society. The government has taken several steps intended to make life easier for citizens with foreign currency debt issues. Not too many people used the option first offered by the government, i.e. repaying forex loans at a fixed rate. "Final-repayment” was a viable option only for borrowers with accumulated financial assets, while the purchase of repossessed apartments by the National Asset Manager equally provided support for few people only. The measure introduced last, i.e. the forintization of FOREX based mortgage loans lifted a significant burden from the shoulders of many families, while the sums deemed "unfair" and recovered from banks were gratefully received by the debtors. In total, the level of household debt relative to disposable income was reduced.


Household savings

After 2008, the household savings ratio of the Hungarian population as a proportion of disposable income has risen, and constantly remained, above 10%. This occurred against the backdrop of extremely unequal income distribution, meaning that the proportion of households with the potential to put aside savings is heavily constrained. In any case, Hungary's household savings rate has remained significantly higher in recent years (10.4% in 2012) than the Visegrad Countries average (8.5%). On the other hand, it still lags behind the EU average (13%).


Long-term interest rates

Although Hungarian interest rates decreased significantly both for long-term government bonds and for the short-term, as measured by the three-month interbank interest rate index, a significant premium was preserved for both indicators compared to the EU average and the other Visegrad countries. This is shown by the fact that the average yield levels of long-term government bonds in the Visegrad countries was 3.81% in 2012 compared to 5.92% in Hungary, while the V4 average for three-month interbank interest fell to 1.97% in 2012, compared to 4.18% in Hungary.