On Friday, the international credit rating agency Moody's Investors Service upgraded Hungary's sovereign debt rating by one notch from the previous "Baa3" to "Baa2", and at the same time changed the outlook for the Hungarian sovereign rating from positive to stable, which has been in effect since last September.
The Magyar Nemzeti Bank (MNB) welcomes Moody's favorable assessment. As the central bank has already indicated on several occasions, Hungary is ripe for another upgrade, which is also justified by the rapid economic recovery after the coronavirus crisis and the preservation of financial stability, the MNB emphasized in its announcement.
According to the central bank, an important factor in improving the debtor classification was the successful restart of the Hungarian economy in the first half of 2021. The MNB trusts that the credit rating agencies will recognize the substantial and sustainable improvement of the fundamentals of the Hungarian economy in the future with further upgrades.
They recalled that among the favorable macroeconomic processes, Moody's singled out the strong economic growth returning after the crisis , which was effectively supported by fiscal and monetary policy. Hungary's gross public debt is expected to decrease again this year from last year's level of around 80 percent of GDP, and may decrease further in the following years. The credit rating agency emphasized that Hungary is thus among the few countries with a similar rating that can reduce its debt ratio between 2020 and 2023.
According to the credit rating agency, after the pandemic, the average economic growth may stabilize permanently at a level between 3-4 percent in the following years , which is supported by the high investment rate. In its statement, Moody's also highlighted that Hungary's credit rating can improve further if the measures to improve competitiveness - also advocated by the MNB - are effectively implemented.
Minister of Finance Mihály Varga informed about the upgrade on his social media page.
Source: MTI
