Forint saved? Hungary’s S+P rating better than expected

S+P Global Ratings affirmed Hungary’s BBB- sovereign rating with a stable outlook at a scheduled review on Friday.

“The stable outlook reflects our view that Hungary’s small open economy is steadying after a series of external shocks,” S+P said in the rationale for the rating action, noting a shift by policymakers to tighter monetary and fiscal settings. The growth outlook beyond 2023 “remains healthy”, it added. The Finance Ministry said the rating action signals S+P’s confidence in the Hungarian economy, MTI added. The investment grade rating is also an acknowledgement of government measures to improve balance indicators, it added.

Világgazdaság wrote that the forint’s decline in the last few days was because investors expected a downgrade from S+P. However, remaining in the BBB- means that the three big credit rating agencies held Hungary in the “recommended for investment” category. The Hungarian government-close newspaper added that might be because Hungary is past the hardest crisis period.