Hungarian debt: things are looking up

„After several years of being central Europe’s bad boy on the bond block, Hungarian debt has had a remarkable six months. Foreign investors, noting the government’s determination to curb state expenditures and rein in debt, have piled into local bonds to hold what are now record levels – Ft 3,600bn (€13.7bn) – more than one third of the total amount. (...)

After some labour leaders accused Orban of forcing these measures through with contempt for the consultation process, demonstrators took to the streets across the country in June. Although the government’s resolve appears unshaken, such protests inevitably raise fears that plans may be watered down.

For now though, foreign investors seem confident that the government will largely follow through on its promises, and as Horvath notes, sentiment has been further strengthened by Fitch’s recent tweak to its ratings, moving Hungary’s outlook to stable from negative, and China’s pledge last month to buy into Magyar state debt.”