AKK modifies 2020 financing plan because of bigger deficit

akThe Government Debt Management Agency (AKK) on Tuesday said it modified its 2020 financing plan to accommodate a bigger budget deficit, widened by policy measures to ease the economic fallout from the coronavirus crisis.

AKK noted that the ESA accrual-based 2020 general government deficit target had been raised from 2.7pc to 3.8pc of GDP, which translates as a HUF 289bn increase in the cash flow-based deficit to HUF 1,890bn.

To accommodate the increased financing requirement, AKK is raising its annual target for gross issues to institutional investors by HUF 419bn to HUF 4,088bn and modifying its earlier plan for EUR 4bn of FX bond issues and FX credit to EUR 4bn of FX bond issues and EUR 500m of credit from international financial institutions.

In addition to the EUR 2bn FX bond issue in April, AKK plans to issue Green Bonds, denominated in euros, yen and, “in so far as possible”, yuan, the agency said.

AKK said it projects retail government securities sales to fall as the result of the pandemic, but reiterated its plan to raise the level of government debt held by households to HUF 11,000bn by 2023 from HUF 7,766bn at the end of last year.