Hungary Secures €1 Billion Three-Year Loan from Chinese Banks in April Amid Record Debt

Jul 26, 2024, 06:51 AM

Hungary has secured a €1 billion loan from three Chinese banks, marking the largest loan ever taken by Budapest. The loan, which was quietly obtained in April, was provided by the China Development Bank, the Export-Import Bank of China, and the Hungarian branch of the Bank of China. It is a three-year floating-rate loan intended to finance high-tech investments, transport infrastructure, and energy-related expenditures. Hungary's public debt has reached a record high of €140 billion, representing 73.5 percent of its GDP. The Hungarian government did not publicly announce the loan at the time, and it only became known after data from the government's debt agency was published. The loan was fully utilized on April 19, just before Xi Jinping's visit to Hungary. This financial move highlights Hungary's increasing economic ties with China and suggests that such financing might become more common in the future. Bloomberg suggests that this is only the first tranche of a credit line worth up to 10 billion euros.