S+P Global Ratings affirmed its ‘BBB-/A-3’ long- and short-term foreign and local currency sovereign credit ratings on Hungary in a scheduled review on Friday.
Magyar government must take crucial reforms
The outlook remains negative. “The negative outlook reflects our view of risks to Hungary’s fiscal and economic stability over the next two years. Large budgetary deficits, high debt, and elevated interest expense continue to limit Hungarian authorities’ policy flexibility to manage endogenous and exogenous pressures,” S+P said.
S+P could lower the ratings if fiscal performance is weaker than forecast and the government fails to stabilize public finances over the next two years, or if external pressures compound, for example, through a more severe and prolonged energy price shock.
The outlook on the ratings could be revised to stable if reforms strengthen Hungary’s institutional and fiscal frameworks, underpinning its eurozone accession efforts, it said.
The rating agency acknowledged the new government’s “significant latitude” to legislate policy changes on fiscal, investment, economic, judicial, procurement and social policies, as well as expectations it will take steps to unlock Hungary’s European Union funding, but said uncertainty on public finances “remains considerable”.
Huge deficit remains
S+P said Hungary’s general government deficit could reach 6.8pc of GDP in 2026, due to pre-election spending and the cost of household energy subsidies, but it does not expect the fiscal cost of the energy and fuel subsidy regimes to exceed 1.5pc of GDP for the year or erode the government’s strategic reserves. S+P forecasts a deficit of 5.25pc of GDP for 2027.
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S+P highlighted the impact of the stronger forint and a decline in yields on government securities amid a post-election market rally, indicating strong investor demand for Hungarian sovereign debt and lower perceived risk premiums. It estimated state debt levels, relative to GDP, could peak at 74pc in 2027, before starting to decline.
“Despite elevated debt, we see no immediate government funding risks. The government has access to a broad array of tested domestic and foreign financing sources, including the local banking sector, a sizable domestic retail bond program, and regular issuance on international capital markets, including Eurobonds and green bonds denominated in euro, renminbi, and yen,” S+P said.
GDP growth to accelerate
The rating agency sees Hungary’s GDP growth accelerating to 1.6pc in 2026 and 2.4pc in 2027, driven by domestic demand, a recovery in exports, and improved confidence. It noted that FDI has expanded Hungary’s electric vehicle and battery manufacturing sectors, with new capacity coming online in 2026-2027, but said those sectors’ ability to boost export capacity and industrial synergies depends heavily on external demand. Beyond the EV sector, medium-term growth remains contingent on Germany’s economic performance, global trade tariff developments, and the impact of geopolitical tensions on energy and import prices, it added.
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If the “credit rating agencies” racket is happy about something, it should make us ordinary folk shudder.
Their specious “ratings” are based on absolutely nothing but political allegiances and naked interests of the shadowy global(ist) elites.
If we’re going to ditch the forint, it would make far more sense to sign up to the yuan or even US$ than the euro. The EuroZone is producing less of anything literally by the day and they won’t be importing much of anything from us for too long, either.