World Economy

Fitch Reviews Hungary Rating

Fitch Reviews Hungary RatingFitch Reviews Hungary Rating

Fitch rating agency will release its review about the Hungarian economy and sovereign debt late Friday, FXStreet reported. The current rating is BB+ with a positive outlook, which was modified from stable one year ago. Although there were some expectations already in November that Hungary might get the investment grade back, now it looks like that it won’t happen now. The main reason is that the government plans some fiscal loosening for next year and the structural fiscal balance is already deteriorating. Also the first quarter’s GDP growth was extremely weak, the second worst in EU after Greece performance. The figure highlights how dependent the economy is on the EU funds flows and vehicle production. The last days’ market movement suggests that the bigger surprise would be if Hungary gets back the investment grade, so in that case the forint may strengthen while yields may drop.