Fitch cautions Hungarian government on budget path, offers brief reprieve before possible downgrade

Fitch Ratings evaluated Hungary’s medium-term fiscal targets and the 2027 budget, finding them aligned with the conditions for euro adoption by 2030. The agency warned that the severe fiscal slip in 2026 makes the execution of the “hard-to-implement” budget adjustments a central factor in upcoming rating decisions. It stressed the difficulty of offsetting a series of planned expenditure hikes—including pension boosts, tax cuts and public-sector wage rises—with sufficient savings to reduce the debt ratio over the medium term.

Fitch also pointed to risks stemming from the government’s reliance on many small-scale measures and uncertainty over achieving efficiency gains in the public sector. The next formal review is scheduled for December 2026, with any rating change expected no earlier than spring 2027 and more likely in the autumn.