Fitch Lowers Hungary's Outlook to Negative Amid Widening Deficits, Rising Debt; Rating Confirmed

01:24 AM EST, 12/08/2025 (MT Newswires) -- Fitch downgraded Hungary's outlook to negative from stable, while maintaining the country's long-term issuer foreign-currency default rating at BBB, according to a Dec. 5 release. The outlook revision is driven by the country's "large" and widening government deficits, growing debt, and weakened policy predictability amid frequent changes to fiscal targets. The rating agency also highlighted risks from Hungary's reliance on Russian energy imports, the impact of the 2026 parliamentary elections, and the country's weak economic performance. Fitch said its projected 0.3% gross domestic product growth in 2025 means the economy will have averaged zero growth over the entire 2023 to 2025 period. The weakness is attributed to "tight" monetary policy, subdued consumer sentiment, and lower public investment, partially from reduced European Union fund inflows. Regardless, the rating agency noted that Hungary's GDP per capita is "well above" the peer median, with Fitch forecasting real GDP growth to accelerate to 2.3% in 2026 on expected tax cuts boosting private consumption and a gradual return of investment. Fitch added that further acceleration to 2.6% in 2027 is anticipated to be supported by improved external demand and increased exports from new automotive and battery production capacity.