A major country risk benchmark, the 5-year CDS premium fell below the 100 point-mark, to 98 points, signalling that market investors appreciate achievements of the Hungarian economy and are upbeat concerning the country’s outlook.

The Hungarian economy has been on a steady growth track since 2013. GDP data show a stable economic structure, growth based on multiple pillars, with almost every sector contributing to it. Economic growth has not generated debt; on the contrary: the government debt-to-GDP ratio has been firmly below the 3-percent threshold in recent years, and the indicator has improved more markedly than others in the EU – thanks to a prudent fiscal policy, sensible debt management and economic expansion. In the first seven months of 2017, external trade posted a surplus of EUR 5.2bn, as a result of which the current account showed a surplus of 5.8 percent of GDP in the second half of 2017.

In recent years, international institutions, joined by credit rating agencies last year, have   come to recognize the results of the Hungarian economy.

Market investors, on the other hand, have long held a positive view of the country, as the persistent decline in bond yields and CDS premia show. On 3 May 2010, this indicator was at 195 basis points, skyrocketing to 730 points by the beginning of 2012. Thanks to potent crisis management and a pro-growth economic policy, the CDS premium was back to around 200 points by the middle of 2014 and to 98 points today, falling below the 100-point mark.

Hungary has been on the right path with an encouraging economic outlook, underpinned by the six-year wage agreement, tax cuts and the Government’s competitiveness-boosting measures.

(Ministry for National Economy)