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/C O R R E C T I O N -- DEUTSCHE BANK/

 /C O R R E C T I O N -- DEUTSCHE BANK/
 In DC014, Hungary Spotlighted in Most Recent Edition of Deutsche


Bank's 'Focus Eastern Europe,' moved yesterday, we are advised by a representative for the company that the fifth graph, second line, should read, "$1.2 billion current account deficit," rather than "$1.2 billion balance of payments deficit," as originally issued. The corrected release follows:
 HUNGARY SPOTLIGHTED IN MOST RECENT EDITION OF DEUTSCHE BANK'S
 'FOCUS EASTERN EUROPE'
 FRANKFURT, Germany, Dec. 5 /PRNewswire/ -- "Hungary is now an accepted partner in international capital markets," with significant implications for its domestic economic stabilization program, writes the Economics Department of Deutsche Bank AG.
 In its most recent edition of the "Focus Eastern Europe" series, Deutsche Bank notes that, on eight separate occasions this year, Hungarian entities successfully issued new bonds, which together totaled $1.3 billion. In addition, a consortium of 10 banks led by Deutsche Bank prolonged a stand-by credit of DM 500 million, with the banks themselves assuming 10 percent of the risk.
 International leading follows on what Deutsche Bank calls Hungary's overall positive economic development. Hungary now receives two-thirds of all foreign direct investment in Eastern Europe, including the Soviet Union, with capital inflows totaling $2 billion for 1989 and 1990.
 In particular, Hungary's external sector has defied expectations of decline after the collapse of the Comecon trading system. In the first three quarters of 1991, hard-currency exports rose 31 percent over 1990. Today, some 70 percent of Hungary's exports go to the OECD countries.
 Even the International Monetary Fund's projections of a $1.2 billion current account deficit for 1991 have proven incorrect, notes Deutsche Bank. "After a surplus of $260 million at the end of September, chances are good that Hungary will have a balance of payments surplus of $200-$300 million in 1991."
 While Hungary's total foreign debt has changed little -- $19.7 billion in June 1991 compared to $21.3 billion at the end of 1990 -- its debt servicing capacity has markedly improved, Deutsche Bank writes. The country's debt-ratio (gross debt minus hard-currency reserves in relation to hard-currency receipts in a given year) improved from 1.75 years in 1990 to 1.4 years in 1991. By the same token, Hungary's debt-servicing ratio (interest and principal payments as a percentage of hard currency earnings) fell from 45 percent in 1990 to 30 percent today. Hard currency reserves rose $450 million in the first six months of 1991, to $1.5 billion.
 Domestic achievements are equally positive:
 -- Production in the private sector increased 25 percent in the first nine months of 1991, though it fell 18-20 percent for state-owned firms.
 -- The monthly inflation rate fell from 7.5 percent in January to 0.2 percent in August; the annual inflation rate is expected to be 34-37 percent this year and the forecast for 1992 is well under 30 percent.
 Finally, Deutsche Bank notes that Hungary's new central bank law took effect on Dec. 1 of this year. The law, which is modeled after Germany's, grants far-reaching independence to the new central bank.
 -0- 12/6/91
 /CONTACT: Dr. Otto Storf of Deutsche Bank AG, Frankfurt, 011-49-69-7150-4710; or Ute DeFarlo of TransAtlantic Futures, Inc., 202-462-1222, for Deutsche Bank AG/ CO: Deutsche Bank AG ST: IN: FIN SU:


SB -- DC015 -- 0166 12/06/91 14:24 EST
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Publication:PR Newswire
Date:Dec 6, 1991
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