Hungaryʼs economy will shrink this year at a rate not seen since the 2009 global financial crisis but is set to rebound next year, Fitch Ratings said on Friday, according to a report by state news wire MTI.
In an updated regional forecast, the agency said it expects real GDP to fall by 5.9% in this year due to the coronavirus shock.
Fitch forecasts 5.4% real growth for 2021.
It said Hungaryʼs ʼBBBʼ rating with stable outlook balances strong structural indicators and stronger and more stable macroeconomic performance than peers against high general government debt and risks from policy unpredictability and pro-cyclicality.
The economy is starting to recover from a likely low-point in April, when lockdown measures were at their peak. Vehicle production is being increased and confidence indicators are reviving.
Fitch said it expects the fiscal deficit to widen to 4% of GDP in 2020 after the government announced a fiscal package worth 12% of GDP, which includes wage subsidies, investments in healthcare, and guarantees for businesses.
The agency added, however, that it sees the deficit fall to 2.1% in 2021.