“Scope affirms Hungary’s credit rating of BBB”
The outlook on the long-term issuer and senior unsecured debt ratings has been set to "positive." The outlook on the short-term issuer rating is "stable," Scope Ratings announced in a press release sent to the Budapest Business Journal.
According to the press release, the drivers for todayʼs rating action reflect:
i) the sovereign’s robust economic performance and outlook, along with an ongoing pickup in the absorption of European Union structural funds;
ii) significant progress achieved in reducing external imbalances, driven by sustained current account surpluses and deleveraging in the private sector;
iii) the consolidation of public finances accompanied by a marked improvement in public debt structure and funding sources; and
iv) the stabilizing and strengthening financial sector.
The positive outlook indicates Scope’s assessment that the upside potential from better-than-expected economic and fiscal outcomes outweighs the challenges stemming from a still high public debt burden, the country’s low non-price competitiveness and labor shortages, as well as weakening institutional credibility and economic policy predictability.
Despite a continued downward trajectory since 2011, Hungary’s public debt of 73% of GDP in 2017 remains relatively high compared to that of peers and well above the Maastricht threshold of 60%, notes the assessment.
Read more: bbj.hu