The Change of Government Debt Management in the Visegrád Countries

Abstract

Management of government debt in Hungary is a particularly important task, as the country has a relatively high level of debt above 70 per cent of GDP, despite its declining trend in recent years. The same indicator is lower in the other Visegrad countries, in Czechia, Poland and Slovakia, it is between 32 and 49 per cent. Since 2010, the Hungarian Government Debt Management Agency has also placed considerable emphasis on making public debt financing more secure and has achieved significant results. In terms of managing public debt, three types of risk factors are distinguished and are called ‘original sins’ in the economic literature. The first one is indebtedness in foreign currency, the second one is short-term indebtedness, and the third one is indebtedness to foreigner investors. This study examines the effects of these three risk factors from a theoretical point of view. The evaluation of these risk aspects between 2010 and 2018 in Hungary is also presented in comparison to Czechia, Poland and Slovakia. The results obtained suggest that at present Hungary and Slovakia are in a better position than directly after the crisis in two parameters, and Czechia has improved in one, while Poland has increased its risk exposure in all the three criteria.