Scope Ratings has endorsed Hungary for investment, as announced by Finance Minister Mihály Varga on his social media platform. The company commended Hungary for attracting foreign direct investment, contributing to sustained economic growth.
Following the affirmation of Hungary’s ‘BBB’ rating with a stable outlook by the three major credit rating agencies, Berlin-based Scope Ratings has also confirmed the same. The rating agency provided a favourable evaluation of Hungary’s investments aimed at enhancing competitiveness and its resilience to negative external shocks.
According to Finance Minister Mihály Varga’s Facebook post, Scope Ratings anticipates economic growth of approximately 2 to 3 per cent in Hungary in the coming years, accompanied by a diminishing budget deficit and declining public debt. The agency highlighted Hungary’s robust economic performance driven by foreign investment and EU funding, sustaining an average annual output growth of 4.1 per cent from 2015 to 2019 before the pandemic. Despite potential vulnerabilities due to reliance on energy-intensive industries with complex value chains and expectations of subdued economic activity among major trading partners, Scope Ratings emphasized the positive impact of significant foreign direct investment (FDI) on sustaining growth.
The rating agency forecasts a strong recovery in real output, with estimated growth rates of 2.4 per cent in the current year and 3.1 per cent in 2025, following a contraction of approximately 0.6 per cent in the previous year. Scope Ratings highlighted the supportive role of improved real income as inflation recedes. Additionally, Hungary’s long-term growth, estimated at around 3.5 per cent, is attributed to substantial foreign investment in the automotive sector, particularly in the emerging electric vehicle industry, aligning with broader environmental goals.
The agency expects substantial foreign investments in battery production to further attract funding, leading to increased job creation, technological advancements, and enhanced exports. Scope Ratings emphasized that Hungary’s BBB credit ratings are reinforced by the robust structure of external and public liabilities.
In line with Scope Ratings, Fitch Ratings and Moody’s have also assigned Hungary a favourable rating, recommending it for investment. Fitch Ratings, in October of last year, forecast steady economic growth in Hungary from the current year onward, contributing to a reduction in the country’s debt ratio. Moody’s, in its autumn 2023 financial report, highlighted Hungary’s return to a high growth trajectory in 2024, accompanied by significant reductions in the budget deficit and public debt by the government.
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Sources: Hungarian Conservative/Scope Ratings
