Budapest (MTI) – Moody’s Investors Service upgraded Hungary’s long term issuer and senior unsecured government bond ratings by one notch to Baa3 from Ba1 late Friday, putting the country back in investment grade.
The outlook on the rating is stable.
Explaining the rationale for the ratings action, Moody’s said Hungary’s debt burden will continue to gradually decline and structural improvements will support positive growth rates, while the country’s external vulnerability has been significantly reduced.
Moody’s said the stable outlook on the rating reflects “balanced risks”.
“Moody’s expects the greater predictability in policy making seen in the last couple of years will be sustained, resulting in a more stable, growth-friendly policy environment in Hungary than in the past,” it added.
A continued improvement in Hungary’s economic and fiscal metrics as well as structural reforms that stimulate private investments could lift the country’s rating, Moody’s said. Downward pressure on the rating could arise from a weakened commitment of policymakers to contain the budget deficit or continue to reduce debt as well as the introduction of any policy measures that would negatively impact the economic growth outlook, it added.
Ratings agency Fitch bumped Hungary back into investment grade in May and Standard and Poor’s followed suit in September.