While GDP was positively affected by the combined performance of services, the economy's performance was held back by industry and construction.Continue reading
Berlin-based Scope Ratings affirmed Hungary’s “BBB” rating and the rating agency also confirmed its previous stable outlook. Hungary is thus still considered an investment grade country, in line with other rating agencies’ recommendations.
The Ministry for National Economy said in a statement that Scope Ratings gave a positive assessment of Hungary’s competitiveness-enhancing investments and its resilience to negative externalities. The rating agency sees strong growth dynamics and solid medium-term growth prospects for the Hungarian economy, they added.
They expect Hungary’s budget deficit and public debt to decline in the coming years.
It said that the structure of public debt is sound and less vulnerable to external shocks, due to a high share of domestic financing, and the external balance of the national economy is stable. Looking ahead, the economic outlook is underpinned by significant capacity-increasing investment.
The ministry stressed that Hungary’s financing position remains stable and secure, and the government remains committed to maintaining strong fiscal control that contributes to reducing the fiscal deficit and public debt.
In line with the fiscal tightening, the government plans a budget with a primary balance, i.e. a balanced budget position (zero), in the coming year net of interest on government debt,
they wrote.
They noted that the Hungarian economy has strong fundamentals and remains an attractive target for international investors.
Domestic economic developments are pointing in a positive direction, with real wages rising steadily for a year and a half; tourism in Hungary is set to have another record year this year; employment is outstanding, with some 4.7 million people in work; the number of registered job seekers is at an all-time low; the new and used car market is picking up; the number of housing transactions is growing dynamically; and retail lending is also on the upswing, the ministry pointed out.
The government is also continuing to work on strengthening industry and supporting Hungarian small and medium-sized enterprises, reads the statement. The Demján Sándor Program, launched under the New Economic Policy Action Plan, provides HUF 1,400 billion (EUR 3.5 billion) in funding to increase the productivity, efficiency and competitiveness of Hungarian small and medium-sized enterprises, and the government has decided to increase the 100 new factories program to 150.
Via MTI, Featured image: Facebook/Audi Hungaria Győr