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Weaker forint, a struggling economy, long-lasting extra taxes in Hungary?
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Fitch Ratings affirmed Hungary’s investment grade sovereign rating after Moody’s and Scope Ratings did alike. However, the American credit rating agency sees significant challenges in Hungary’s economy. One is the Orbán cabinet and its unorthodox economic policies.
Are the Orbán government’s policies a threat? Is a weaker forint coming?
According to portfolio.hu, Fitch Ratings has kept Hungary in the BBB category with negative prospects since January 2023. Based on their analysts, Hungary’s budget deficit will decrease in 2024, but the state debt will increase. They do not expect the Orbán cabinet to revoke the so-called excess profit taxes because the administration needs that money badly for pensions and public services.
Fitch considers the decreasing global demand for batteries a risk. According to their experts, that trend may make economic growth more difficult in 2025-2026. Moreover, they calculate an EU-Hungary clash due to Brussels’ policies concerning the import of Chinese electric cars. For example, the Chinese Polestar will enter the Hungarian market in 2025, based on a recent announcement.
According to Fitch, Hungary has negative prospects because of the state budget and the high rate of state debt.
I will have whatever Mr. Varga is on – Hungary is the Land of Milk, Honey and Unicorns!
Now for facts and data. Let´s look at credit ratings in Europe?
https://tradingeconomics.com/country-list/rating?continent=europe
I know, I know, you will have to scroll down. We are at BBB- with Romania and Greece. Bottom feeders.
Fidesz is ruining the economy in large part due to its’ fascist disruption of free markets and open competition. It’s all due to the sheer greed of the Fidesz elite to line its’ pockets by forcing companies to sell themselves to Fidesz connected oligarchs. Fidesz has been putting discriminatory regulations and taxation on companies that it disfavours to force them to sell or dampen their business so that Fidesz owned competitors can compete. The result is that you create a much less efficient economy and higher prices by having so much of it the hands of people who are connected but incompetent. Labour productivity as a result is 32% below the EU average. That means that to compete with the rest of the EU Hungarians must be paid at least one third less for their labour. Hungarian proles are paid even less than that due to the greed of Fidesz company owners and talented young people find a big incentive to leave the country which in turn leaves a lower quality pool of workers feeding into lower productivity.