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Hungary has repaid an 8-year-old loan

Hungary’s central bank said today it had fully repaid a multi-billion-euro loan it took out in 2008 from international lenders to prop up its wobbling economy during the financial crisis.

“A joyful day has dawned on us, we are finally over a long and difficult period,” Economy Minister Mihaly Varga said in Budapest today.

The EU member state had been forced to borrow around €20 billion from the International Monetary Fund (IMF), the European Union and the World Bank after it was frozen out of the bond market at the height of the global financial crisis. But the country’s economy has grown steadily over the past four years, with inflation and interest rates dropping to record lows. Government debt and the budget deficit have also come down since right-wing Prime Minister Viktor Orban took power in 2010.

As a result, Varga said Hungary was able to make the final €1.5 billion payment, owed to the EU, last week. In 2013, the country had already paid off the €12.5 billion portion borrowed from the IMF ahead of schedule. Varga said he hoped the reimbursement would improve Hungary’s standing among credit rating agencies.

In 2008, Hungary reached an agreement with the IMF, the EU and the World Bank on an economic rescue package to help the country bolster its economy in the face of the global financial crisis. The IMF offered Hungary a €12.5 bln loan, the EU a €6.5 bln loan and the World Bank a €1 bln loan.

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