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S+P Downgrades Hungary to BBB-, Bounce-Back Expected

• 30 Jan 2023 9:05 AM
• Hungary Matters

S+P Global Ratings downgraded Hungary’s sovereign rating one notch to BBB- from BBB at a scheduled review on Friday.

The outlook on the rating – one notch over the investment grade threshold – is stable.

The rating agency said the downgrade follows “a series of economic shocks” to Hungary in the context of the pandemic and the war in Ukraine which have “impaired the policy flexibility of fiscal and monetary authorities”.

S+P said the stable outlook on the sovereign rating reflects its expectations that Hungary’s economy will “avoid a substantial economic downturn” over the next two years and weather the indirect effects of the war in Ukraine.

Econ Development Minister Augurs Credit Rating Agency Upgrades 'Soon'

Minister of Economic Development Márton Nagy said Hungary can expect its sovereign rating to be upgraded “within a very short period of time” as a result of favourable economic trends, commenting on a downgrade by S+P Global on Friday.

Nagy noted that rating agencies had upgraded Hungary because of improved economic fundamentals in 2014, 2016 and 2020.

The government won’t “stand by idly” now, either, but will deliver on its economic policy goals, he added.

He said the government’s “most important goal” is to keep the economy out of recession as many eurozone countries are set to enter a period of stagflation.

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