Moody’s credit rating agency warned Hungary changing outlook to negative
Moody’s Ratings affirmed Hungary’s investment-grade sovereign rating, albeit with a negative outlook, at a scheduled review on Friday, the National Economy Ministry said in a statement.
Negative outlook for investments in Hungary
All three big credit rating agencies put Hungary in the investment-grade category, thanks to the country’s stable and resilient economy, the ministry said.
“Hungary’s financing position is stable and secure, and the government is committed to a disciplined fiscal policy and reducing the budget deficit and state debt levels,” it added.
That approach is reflected in the government’s 2025 budget bill which targets a reduction in the fiscal deficit to 3.7pc of GDP. The peacetime budget will contribute to returning the economy to a path of sustainable, high growth, the ministry said.
Hungary’s assessment on international financial markets is favourable, and Hungarian government securities remain popular. Strong investor and market confidence is demonstrated by successful securities auctions and inward FDI, the ministry said, pointing to big investments underway by Chinese companies such as battery makers CATL and SEMCORP and EV maker BYD.
Post-pandemic period was difficult
Hungary’s economy has emerged from a difficult period following the pandemic, the energy crisis and the protracted war in Ukraine, but the weakness of markets in Europe, especially the German economy, has weighed on exports. On the domestic front, indicators point to a turnaround with retail sales and tourism turnover on the rise, showing an increase in consumption, it added.
Government measures to bring down inflation have contributed to the domestic recovery, employment is high and purchasing power is set to continue to rise in 2025 supported by a three-year agreement on minimum wage increase, the ministry said.
The government aims to keep GDP growth over 3pc in 2025 by adopting a policy of economic neutrality and has drafted a New Economic Policy Action Plan that will boost purchasing power, ensure affordable housing and scale up SMEs with the launch of the Demján Sándor Programme, it added.
Finance Ministry also reacted
Moody’s Ratings has affirmed Hungary’s investment-grade sovereign rating, but changed the outlook from stable to negative because of the uncertain international environment and political disputes with Brussels, the Finance Ministry said on Friday.
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