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The agency also cut the capital’s baseline credit assessment from “Ba1” to “Ba2” with a “negative” outlook, signaling the possibility of further downgrades.
Moody’s noted that the government recently withheld funds after Budapest failed to pay the first installment of its 2026 solidarity contribution, deepening the city’s short‑term financing gap despite a HUF 10 billion increase in its overdraft limit.
The rating agency highlighted that the solidarity contribution, significantly increased since its 2019 introduction, remains a major structural burden and could rise further if the Constitutional Court rules in favor of the government.
Despite the downgrade, Moody’s pointed out that Budapest’s debt ratio has improved, f alling to 35% of operating revenues in 2024 from 71% in 2021, with expectations of a decline to 30% by 2027.
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