Fitch Expects Gradual Fiscal Consolidation in Hungary

Hungary's budget is set for a gradual consolidation, while economic growth is expected to accelerate in the coming two years, Fitch Ratings said in a regional credit analysis on Monday.

Fitch noted that the fiscal consolidation would follow a loosening before the general election and increased expenditures to counter the impact of drought and higher energy prices.

Fitch put the 2026 general government deficit at 7.3% of GDP, well over the 3.1% median for Hungary's 'BBB'-rated peers. It sees the gap narrowing to 5.8% of GDP in 2027.

Fitch said the government's commitment to achieving criteria for eurozone accession by 2030 would serve as an anchor for mid-term consolidation. It added that Hungary's state debt relative to GDP was set to reach 78.1% of GDP at end-2028, rising from 74.6% at end-2025.

Fitch acknowledged the impact of the firmer forint, since the election, on state debt levels.

Fitch forecast Hungary's GDP growth would accelerate to 1.9% in 2026 from 0.5% in 2025. It sees GDP growth reaching 2.5% in 2027.