Fiscal slippage: Rating agency issues warning to Hungary
Hungary’s fiscal slippage is increasing uncertainty over debt relief, rating agency Fitch Ratings warned on Friday. It projects a rising public debt ratio by the end of this year and sends a clear message that a sustained loosening of fiscal policy could lead to a negative rating move.
Fitch Ratings building in London, England. Photo: depositphotos.com
“Hungary’s (BBB/Negative) weak 1Q24 fiscal performance underscores the challenge of hitting this year’s deficit target, Fitch Ratings says. Recent fiscal slippage adds to uncertainty around the public debt trajectory,” the rating agency reported.
Rating agency issues warning
The rating agency expects Hungary to be placed under the excessive deficit procedure in 2024. They believe that the government should therefore present a multi-year consolidation strategy, Portfolio reports based on the rating agency. Fitch also recalled that the government has set a deficit target of 3.7% in 2025 and 2.9% in 2026. “Given increased budget rigidities and parliamentary elections in early 2026, we expect a 2025 deficit of at least 3.9%,” they wrote.
Fitch Ratings also noted that it does not expect Hungary to face financing challenges despite a higher budget deficit this year.
Source: Facebook/Varga Mihály
The analysts of the rating agency believe that this year’s weak fiscal performance in the first quarter highlights the risks surrounding the achievement of this year’s deficit target.
As we reported, the Hungarian budget deficit has almost reached its full-year target by the end of the 3rd month:
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4 Comments
There hasn’t been an economic target made that Fidesz has not missed. They are siphoning as much as they can get away with into their greedy pockets. There won’t be anything left when they leave office. Oh yeah, and they want to spend billions now to buy the airport so they can then turn around later and give it to one of the Fidesz elite for peanuts.
PRESSURIZATION mounting, on the Orban – Fidesz Government, that is NOT of surprise, to those inside Hungary and outside, the cataclysmic MESS that our Economic & Financial picture FACTUALLY represents.
The Prime Minister – Victor Orban and his Finance Minister – Mihaly Varga muchly through there Policies, there FAILINGS, have taken us to this DARKENED place, and what they may pull out of there “Bag of Trickery” will not be the need’s to put an end, or HALT, the on-going capitulation of the Hungarian Economy.
Sadly, as citizens, things are in a worsening trend, that Orban & Varga, the Orban – Fidesz Government hold total responsibility for what they have delivered to Hungary.
Shameful.
These “agencies” are a bunch of charlatans. They can and have brought down entire governments and collapsed countries. They issue “warnings,” often based on political machinations rather than cold, hard economic facts. Investors, creditors, and even ordinary people get spooked, they start selling bonds and there’s a rush on banks: There’s a domino effect. The “credit agencies” then issue even more dire warnings and credit-rating downgrades, which occasions even more turmoil. The next thing you know, a perfectly sound and healthy country is in total chaos, its economy in freefall, the people out on the streets, and so forth and so on. And all based on “warnings” issued by a totally unaccountable, undemocratic, unregulated body that is a law unto itself. Time to do the world a favor and wrap these “agencies” up.
I often notice a lot of “cold hard facts” (and data) missing from arguments. This is not one of those cases.