Mihály Varga’s optimism was justified.

Moody’s Investors Service changed the outlook on Hungary’s sovereign debt rating from stable to positive, the credit rating agency in Frankfurt said. Moody’s set the first revision of this year to Hungary’s sovereign rating for March 27, but then did not put Hungary on the agenda, so it did not announce an amendment to the “Baa3” rating or its stable outlook that day. .

The current positive step was justified by the fact that the credit rating agency performed well compared to countries with similar ratings. The company acknowledged that the coronavirus also has a negative effect on the Hungarian economy, but all of this has little effect on the Hungarian debt situation, the explanatory memorandum states. It also notes that since the last Moody’s update in 2018, the Hungarian community has made further progress in consolidating public finances, and the Hungarian economy has been characterized by strong growth in addition to declining public debt.

Finance Minister Mihály Varga spoke at the Errant Meeting of Economists on Friday morning about the fact that the population has been increasingly cutting the financing of public debt in the last period, which also reduces external exposure, and therefore there is reason to be optimistic before Moody’s announces it. In fact, the credit rating agency highlighted the decrease in external exposure.

Moody’s expects a 5.5 percent drop this year; This is a more optimistic scenario not only compared to the European Commission’s forecast, but even compared to the Hungarian government, and this week the Magyar Nemzeti Bank did not rule out a bigger drop. It is true that the credit rating agency expects lower growth (about 4 percent) next year than the government, but from 2022 they forecast a return to the strong growth of previous years.

Moody’s is not so optimistic about the improvement of Hungary’s sovereign debt, this is mainly explained by the fact that the Hungarian economy is exposed to fluctuations in the demand for German automotive products and, although the legal system is stable, civil society and the judiciary are worse off. as in similar countries. And for the positive outlook to bring improvement, Moody’s expects measures to strengthen competitiveness in the first place.

The other two major credit rating agencies, Standard & Poor’s and Fitch Ratings, also set two dates to review the ratings on Hungarian debt, both February 14 and August 14, respectively, so Hungary is no longer on the agenda of both companies this year. In February, S&P improved from stable to positive (i.e. improving) in Hungary Rating outlook BBB / A-2 and then on April 28 it was restored to its previous stable.



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