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Fitch Ratings: Hungary’s Outlook Stable

Tamás Székely 2014.12.01.

Fitch Ratings has “acknowledged Hungary’s positive undertakings” over the past few years by affirming the credit ratings, the economy ministry said. The rating agency  has affirmed Hungary’s Long-term foreign currency Issuer Default Rating (IDR) at ‘BB+’ and its local currency IDR at ‘BBB-’ with stable outlooks. It projected that Hungary’s economic growth would come in at 3.2% this year before slowing down in 2015.

Hungary’s budget deficit will be 2.9% of GDP this year, and 2.8% and 2.7% in 2015 and in 2016, respectively, the report said. This year’s higher deficit was attributed to election-related measures affecting the budget. Fitch also said that Hungary’s public debt would fall from 77.3% of GDP in 2013 to 76.4% by 2016. Fitch also said the membership of the European Union (EU) provides Hungary with financial support and political stability. According to the rating agency Hungary’s outlook is stable, reflecting that the upside and downside risks to the rating are currently balanced.

Fitch said a marked drop in unemployment rates would help lift consumption, but it expected the economy would grow by 2.3% in 2015 due to European Union funding drying out at the end of the financial cycle. Fitch has given positive feedback on Hungary’s growth outlook, employment market and balance indicators which would help bring down debt and reduce the country’s vulnerability, the economy ministry said.

via and photo: public domain