Any disbursement of Recovery and Resilience Facility (RRF) funding "seems unlikely" before the end of Q3 2023, Fitch said.
Fitch noted that EU officials had said passage of the judicial reforms bill could help unlock a big part of suspended Cohesion Funds for Hungary, but that additional reforms would still be required for that to happen.
"While the impact of delayed disbursement on medium-term growth and public and external finances would be modest, EU funding remains a supportive and low-cost source of finance for Hungary, and further delays would highlight questions over policy credibility," Fitch said.
"Vulnerabilities from a policy mix influenced by political considerations, in the face of tougher external conditions, were a key driver of our decision to revise the outlook on Hungary's 'BBB' rating to Negative at our January review," the rating agency added.
Fitch's next review of Hungary's sovereign rating is scheduled for June 23.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
