London, October 7 (MTI) – Hungary “seems to have a good chance” of being upgraded to investment grade by credit rating agencies next year, based on its fundamentals today, London-based emerging markets economists said on Tuesday.
In a report on sovereign credits on the investment grade/high yield ratings border, analysts at BofA Merrill Lynch Global Research said they believed increased expectations for growth prospects and the fiscal anchor of the EU Commission’s monitoring had created conditions for a return to investment grade next year.
The public and private sector balance sheet adjustments since 2008 are also delivering increasingly evident benefits for GDP growth, they said.
However, any upgrade is unlikely to materialise before next summer, as the agencies will want to wait for the completion of the FX loan dispute and the full data release of the 2014 public debt results and 2015 deficit implementation.
“We expect the rating reviews to remain neutral until then”, the analysts said.
In Hungary’s case, four out of five metrics that have proven to be particularly strong empirical factors explaining emerging markets’ ratings history are better today than at the time of the downgrade, they added.