Hungary's current account swung into a surplus of EUR 549.2mn in the first quarter of 2013 from a EUR 52.7mn deficit in the same period of the previous year, central bank data showed. In our estimates, the surplus accounted for 0.6% of the GDP in Q1 2013. The surplus on the foreign trade account increased by 24.3% y/y to EUR 1.11bn. Exports advanced 0.7% y/y to EUR 19bn, while imports dropped by 0.5% y/y to EUR 17.9bn. The surplus on the service account grew by 7.3% y/y to EUR 726.9mn in Q1 2013.

The deficit on the income account narrowed by 8.3% in annual terms to EUR 1.27bn. The balance of current transfers registered a deficit of EUR 22.2mn, down by 90.8% in annual comparison as a result of higher net EU transfers, which grew to EUR 192.5mn in Q1 2013 from EUR 33.6mn a year earlier.

The surplus on the capital account witnessed a 38.3% y/y increase to EUR 561.7mn in Q1. This combined with the current account surplus led to net external financing capacity of EUR 1.11bn in the first quarter of 2013, up from EUR 353.5bn a year earlier.