Fitch Warns of Hungary's Economic Situation

According to Fitch, Hungary is heading toward a difficult economic period—regardless of the outcome of the parliamentary elections. The rating agency sees the country facing weak growth, rising public debt, and a persistently high budget deficit. The next government must urgently restore the credibility of fiscal policy.

Since 2023, the economy has been virtually stagnant. With minimal growth, Hungary lags significantly behind comparable countries. Weak foreign demand, structural problems, and low productivity are the main factors holding back momentum. Key sectors such as the automotive and battery industries are also currently failing to provide the hoped-for momentum.

Election-driven policies are straining the budget

Expansionary fiscal policy ahead of the elections is creating additional pressure. Higher government spending has widened the deficit and will make consolidation more difficult later on. At the same time, public debt is likely to rise further and reach a level considered risky in the long term.

External risks add to the mix: rising energy prices, geopolitical tensions, and dependence on imports. The devaluation of the forint also limits monetary policy flexibility. In the coming months, the focus will also shift to assessments by international rating agencies—with potential pressure on creditworthiness.

The potential release of frozen EU funds remains a source of uncertainty. It could ease the situation, but is politically uncertain. Without credible reforms, Hungary faces a period of sustained economic weakness, according to Fitch.