S&P Global Ratings affirmed Hungary’s ‘BBB/A-2’ sovereign rating, but revised the outlook to negative from stable. At the same time, the international rating agency continues to recommend Hungary as an investment country.
According to S&P Global Ratings, the change is justified by external risks, including potential cuts to EU funds and reduced gas flows, could weigh on Hungary’s growth prospects and endanger post-pandemic fiscal consolidation. Rising wage and price inflation, a volatile exchange rate, and upward pressure on borrowing costs could also narrow the government’s policy flexibility.