Standard and Poor’s announced on Friday, September 16 its decision to upgrade Hungary’s credit rating to investment grade status in light of the country’s recent economic performance. Minister for National Economy Mihály Varga called the decision another indication of the successful transformation of the Hungarian economy.

Minister for National Economy Mihály Varga commended the decision by credit rating agency Standard and Poor’s to raise Hungary’s long and short-term foreign and local currency sovereign credit ratings from 'BB+/B’ to 'BBB-/A-3' (Investment Grade) as tangible macro-economic proof of the post-2010 success of the Hungarian economy.

Varga said the achievements of the Hungarian economy and market valuations would have warranted such a move some years ago, citing the performance of the country’s risk premia and bond yields that have remained on par with those of investment-grade countries for the past several years. Varga also cited strong GDP growth, fiscal balance, public finances, the size and structure of public debt and other market statistics in support of the long overdue upgrade.

In the announcement, S&P’s analysts stressed that Hungary’s 2016 growth outlook continues to improve: in the period 2016-2019, Hungary's GDP growth is expected to average 2.5 percent annually. S&P also acknowledged the positive balance of payments, the lower share of forex liabilities within total state debt, and the Hungarian National Bank's self-financing scheme have reduced the vulnerability of the country and the financial sector to external risks. S&P also said it anticipates that government's debt-to-GDP ratio will fall below 70 percent by 2019.

(Ministry for National Economy)