Development and Finance from issue 2010/3

Orsolya Csortos

Implications of Debt Accumulated by Hungarian Population

- Abstract -

JEL D-14


One fundamental question that is not easy to answer but definitely gives food for thought is whether Hungarian households are over-indebted or not. The more dynamic growth in the loan/GDP ratio than otherwise justified by convergence, the high PTI ratio, the rise in the ratio of non-performing loans over 90 days and the realisation of forecasted financial risks prompts me to conclude that Hungarian households are over-indebted. To counter the credit boom the government first of all introduced measures to help indebted households directly (e.g. helping out borrowers with mortgage loans), but with a view to ensuring long-term stabilisation it was necessary to deploy preventive measures. Additionally, we have seen efforts to improve the financial culture and finally I presented the ambitious but questionable measures of the new government.

Orsolya Csortos, university student (Corvinus University of Budapest)

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