London, June 6 (MTI) – Fitch Ratings on Friday affirmed Hungary’s long-term foreign currency rating at ‘BB+’ with stable outlook, and its local currency rating at ‘BBB-‘.
Fitch said Hungary’s gross general government debt, at 79.2 percent of GDP in 2013, was around twice the ‘BB’ and ‘BBB’ medians and remained “Hungary’s key rating weakness”.
Fitch said Hungary’s economic growth remained below that of the country’s ‘BB’ and ‘BBB’ peers, adding that the public sector had been the “key growth driver” so far “raising questions about the sustainability of the recovery”. It acknowledged “conventional and unconventional” monetary policy measures to boost economic activity but said it deemed evidence that private sector activity is strengthening “still tentative at this stage”.
Fitch noted a continuing improvement in Hungary’s external balance because of a big current-account surplus.
It said the banking sector was “adequately capitalised” as a whole but pointed out “considerable disparity” among individual banks.
Fitch said the re-election of Fidesz in the spring with another two-thirds majority in Parliament “is likely to mean that the government will continue to mix fiscal discipline with economic policies aiming to increase the domestic footprint in sectors such as banking and energy”.
Fitch said Hungary’s GDP per capita is relatively high compare to its ‘BB’ and ‘BBB’ peers, adding that the country’s European Union membership “underpins domestic politics and institutions”.