We project the Hungarian real economy will expand by 2.6% in 2024 and average 2.8% growth in 2025-2026, after a mild full-year recession whereby real GDP contracted by 0.5% this year. Our projections are based on the assumption that Hungary and the EU will ultimately reach an agreement and some EU funds will be released in the first half of 2024. While we expect fiscal consolidation to take longer, it will be sufficient to stabilize net government debt in the medium term. We affirmed our 'BBB-/A-3' long- and short-term ratings on Hungary and maintained the stable outlook. On Dec. 8, 2023, S&P Global Ratings affirmed its 'BBB-/A-3' long- and short-term foreign and local currency sovereign credit ratings on Hungary. The
