Fitch raises Hungary's credit outlook from negative to stable

On December 6, 2024, Fitch Ratings released its detailed statement regarding Hungary's second credit rating review of the year. The agency has improved Hungary's outlook from negative to stable, while maintaining its rating at BBB, according to Portfolio.hu.

Author

Andrew Davison
December 07, 2024

Since January 2023, Hungary's outlook had been negative, which has now changed, indicating a more positive assessment.

Political Stability Plays a Role

The ratings agency noted that the political uncertainty in Hungary has decreased, which positively influenced their decision. Despite ongoing uncertainties leading up to the 2026 elections regarding the government’s political mix, Fitch believes that the government will find a balance between political priorities and the risks associated with market volatility.

Economic Expectations

Fitch expects the Hungarian National Bank (MNB), under the leadership of newly appointed Finance Minister Mihály Varga, to continue a cautious monetary easing strategy following Q1 of 2025. The agency is estimating a decrease in the benchmark interest rate to 5.25% by the end of 2025, influenced by both domestic price dynamics and increasing external uncertainties.

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