Fitch credit rating agency shares good news concerning Hungarian economy; will forint strengthen?
Fitch Ratings affirmed Hungary’s investment-grade sovereign rating and revised the outlook to stable from negative on Friday, the National Economy Ministry said in a statement.
Fitch affirms Hungary investment-grade rating, revises outlook to stable
The Fitch action shows the underlying fundamentals of the Hungarian economy are stable, the ministry said. All three big rating agencies have recently affirmed Hungary’s investment-grade ratings, it added.
Hungary’s assessment on international money markets is favourable and the popularity of Hungarian government securities continues, the ministry said. Strong investor and market confidence is reflected in successful bond auctions and continuous FDI inflows, including big investments set to boost economic growth by companies such as CATL, BYD, BMW, SEMCORP and EcoPro, it added.
Hungary’s government has created fiscal balance and balanced growth, the ministry said. Hungary’s financing position is stable, while the government is committed to strict budget management and to reducing deficit and state debt levels. By laying the foundations for a lasting upturn, the 2025 peacetime budget will contribute to putting the Hungarian economy back on the path of sustainable, high-level growth, a course affirmed by Fitch’s positive assessment.
Hungary’s economy is stable and resilient, and the country’s economic fundamentals are performing well, the ministry said, pointing to high employment levels, increasing consumption, low inflation and rising real wages.
The government aims to boost Hungary’s GDP growth over 3pc in 2025 by adopting a policy of economic neutrality and rolling out a New Economic Policy Action Plan that will boost purchasing power, ensure affordable housing and scale up SMEs with the Demjan Sandor Programme, the ministry said. The action plan will mobilise HUF 4,000bn of resources, it added.
Last credit rating agency review of year a success
The last credit rating agency review of Hungary of the year was a success, Finance Minister Mihály Varga said in a video message on Facebook, after Fitch Ratings affirmed Hungary’s investment grade rating and revised the outlook to stable from negative. Varga noted that credit rating agencies had conducted reviews of Hungary on twelve occasions during the year and affirmed the country’s investment-grade sovereign ratings in spite of the deterioration in the external environment.
In recent weeks, S+P Global Ratings affirmed Hungary’s investment grade rating with a stable outlook, Moody’s affirmed its rating of the country, but revised the outlook to negative from stable, while Fitch Ratings revised the outlook on its rating to stable from negative, he added. Fitch acknowledged the stability of the Hungarian economy, the big reduction in inflation and growth of investments, Varga said. The rating agency’s analysts forecast accelerating economic growth and a narrowing budget deficit in the coming years, he added.
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