Fitch Ratings has left Hungary’s credit rating unchanged at BB+, with positive outlook.
In the latest report, Fitch predicts that Hungarian economic growth will remain stable in the coming years. Economic expansion is expected to be underpinned by banks’ improving business environment which may boost lending. The creation of jobs, low inflation, the forint conversion of mortgages as well as bank refunds will continue to contribute to domestic consumption growth.

According to Fitch analysis, in comparison to countries of the same rating, per capita GDP is higher in Hungary. Fiscal deficit in their opinion is set to decrease, to 2.3 percent of GDP this year and 2.1 percent next year. Concurrently, the government debt-to-GDP ratio is also to fall lower, to 72 percent in 2017 and as much as 64 percent by 2022. Self-financing schemes will improve debt structure, as both the share of holdings by non-residents and foreign currency denominated debt is expected to decline. As Fitch stressed, they did not see the probability of the risk of a downgrade.

In 2015, both Moody’s and Fitch have upgraded Hungary’s credit rating outlook from stable to positive. However, the performance of the Hungarian economy would have for a long time justified investment grade rating for Hungary. Government bond yields, the country’s credit risk indicator and the massive drop of CDS premia are factors all pointing to this. The confidence of international markets in Hungary has substantially improved and that cannot go unnoticed by rating agencies.

(Ministry for National Economy)