After two years of secrecy, crucial details have been disclosed about Hungary’s EUR 1 billion loan from Chinese state-backed lenders, originally secured in spring 2024. The financing—equivalent to roughly HUF 400 billion at the time—was arranged without prior public announcement and only became partially visible following renewed data requests after the recent election.
These were not known by the public about the loan from China
According to newly released information from the Government Debt Management Agency (ÁKK), the loan carries a variable interest rate tied to the six-month EURIBOR, with an added margin of 1.5 percentage points. At current levels, this translates into an annual interest rate of approximately 3.916%. In addition, Hungary paid a one-off arrangement and commitment fee totalling 0.8% of the loan, or around EUR 8 million.
Short maturity and rising exposure
The credit line was provided by three major Chinese institutions—the China Development Bank, the Export-Import Bank of China and the Bank of China—and was primarily intended to finance infrastructure and energy projects. The loan has a relatively short maturity of three years, with full repayment due in a single instalment in April 2027, writes 444.hu.
Economists note that the borrowing significantly increased Hungary’s foreign-currency debt exposure, pushing the country’s liabilities to Chinese creditors above HUF 1,000 billion. The transaction alone raised the share of foreign-denominated public debt by more than 10%.
Why Orbán lost: a poll reveals the main reasons behind Fidesz’s defeat
Most parts of the contract are still undisclosed
Despite the partial disclosure, authorities continue to withhold the full contract, arguing that publication would disproportionately harm Hungary’s financial and foreign policy interests. This stance has been criticised, especially after a court previously ruled that such agreements involve public funds and should be accessible.
The timing of the revelations has also sparked debate. Earlier attempts by journalists to obtain the data were unsuccessful, with ministries citing confidentiality. Only after the election outcome did the ÁKK provide substantive answers. Critics further point out that Hungary may have secured cheaper financing elsewhere, including from European Union facilities, which remain partly unused due to ongoing disputes over conditions tied to rule-of-law requirements.
Péter Magyar: Outgoing PM Orbán sides with money-laundering oligarchs in latest cabinet decision
Featured image: Orbán Viktor/Facebook
