Hungary: Selected Issues

IMF Staff Country Reports, December 5, 2019

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Hungary: Selected Issues

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Bibliographic details

• Published: December 5, 2019
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781513521435.002

Overview

• Publication date: December 5, 2019
• Type: IMF Staff Country Report (Country Report No. 2019/358)
• Pages: 28
• Volume: 2019
• Issue: 358
• DOI: https://doi.org/10.5089/9781513521435.002
• Stock No: 1HUNEA2019002
• ISBN: 9781513521435
• ISSN: 1934-7685
• The paper examines recent changes in Hungary’s public debt strategy with special attention to the “Hungarian Government Security Plus Scheme” (MÁP+) for physical persons, introduced in June 2019.

Key findings on MÁP+ and retail bonds

• MÁP+ is a retail bond program for physical persons introduced in June 2019.
• One of the main benefits of retail bonds is that they usually are perceived as more stable funding.
• The paper focuses mainly on the MÁP+ bond, the initial experience with this bond, and elaborates on its potential implications.
• MÁP+ has many reasonable objectives, although some objectives are influenced by broader macroeconomic policies:
  • Higher a savings rate of households
  • Reduced external indebtedness
• These objectives are noted to be "to a major extent driven by macroeconomic policies."

Analysis and concerns

• It is argued that MÁP+ should be continuously monitored to ensure its objectives are achieved in the most cost-efficient manner and to avoid unintended distortions.
• Going forward, the paper raises the question whether the objectives of MÁP+ can be achieved by appreciably lower cost to the budget given less expensive alternative funding sources and policy options.
• Public debt management also needs to respond to changing market conditions.

Policy implications and recommendations

• Continuously monitor MÁP+ to:
  • Ensure objectives are achieved cost-efficiently
  • Avoid unintended market distortions
• Evaluate whether alternative, less expensive funding sources and policy options could achieve the same objectives at lower budgetary cost.
• Ensure public debt management adapts to changing market conditions.

Subjects and keywords (as listed)

• Subject: Currencies, Financial institutions, Financial transaction tax, Government debt management, Government securities, Money, Public debt, Public financial management (PFM), Taxes
• Keywords: cash, cash hoarder, cash holding, cash payment, CR, Currencies, currency, Financial transaction tax, financing, Global, Government debt management, government securities, Government securities, ISCR, MÁP, payment system

Additional publication context

• The IMF eLibrary is noted to offer over 25,000 IMF publications in multiple formats.
• Format citation example provided in Chicago style in the source content.

Source: IMF Staff Country Report "Hungary: Selected Issues" (Country Report No. 2019/358), December 5, 2019.

Content in this bundle

• Hungary: Selected Issues; IMF Country Report No. 19/358; November 12, 2019
  • Hungary: Selected Issues; IMF Country Report No. 19/358; November 12, 2019 (Markdown version)
  • Hungary: Selected Issues; IMF Country Report No. 19/358; November 12, 2019 (PDF)