Fitch affirms Hungary's rating at BBB with negative outlook

ISTANBUL

Fitch Ratings announced Friday it affirmed Hungary's long-term foreign-currency issuer default rating at BBB with a negative outlook.

The rating agency said the country's ratings are supported by its strong structural indicators, investment-fueled economic growth and solid net foreign direct investment inflows.

These are balanced, however, against high public debt, a record number of unorthodox policy moves and a worsening of governance indicators in recent years, it said.

Hungary's negative outlook reflects "risks around the policy environment and the performance of public finances, which could undermine economic stability and pressure financing costs," it said in a statement.

After a 0.7% decline in 2023, Fitch expects Hungary's real GDP growth to rise to 2.3% in 2024 and to 3.8% in 2025.

The agency said Hungary's rating could be revised downward if there is a failure to address risks around macroeconomic policy credibility and governance that would undermine its macroeconomic performance.

The country's rating could be upgraded if there is an improvement in governance and economic policy, and greater confidence that the government will put the public debt/GDP ratio on a downward trajectory, according to the agency.