Fitch Ratings did not qualify Hungary either



Monday evening, the international rating agency announced late in London that there was still a positive outlook on the possibility of upgrading the Hungarian sovereign rating.

In its analysis of the ratification of the class, Fitch emphasized that the Hungarian sovereign debt classification reflects on the one hand that the structural indicators of the Hungarian economy are strong compared to the values ​​of the other sovereign debtors registered by the company in the rating category "BBB", taking into account with higher audience figures. and the net external debt ratio, as well as the risks resulting from the unpredictability of policy making and pro-cyclical fiscal policies.

However, Fitch Ratings emphasizes that the positive outlook for the Hungarian rating points to the improvement process of the net external debt and government debt.

The company also emphasizes in its analysis that the continued surplus of the current account balance of Hungary, the net inflow of foreign direct investment and the European Union disbursements have contributed to the improvement of the external position of the Hungarian economy in In recent years.

Fitch Ratings has reported that this year 2.3 percent of the Hungarian domestic product (GDP) and for the period 2019-2020 average 1.9 percent of GDP in the current account surplus. This is slightly lower than last year's surplus, which was 3.1% of GDP, while import-dependent investments are rising, while the current account balance in Hungary is favorable due to the sovereign debtors of the company included in the BBB- band, minus 1.9 compared with the percentage of GDP.

Net external debt increased by 18.6 percent of GDP last year from 11.6 percent in 2016, but Fitch Ratings expects this figure to rise to 13.7 percent this year, predicted to 2020. until the end of the period up to 5%. This roughly corresponds to the median value of public accounts receivable classified as "BBB" on the list of companies – is Fitch & # 39; s Friday analysis in London.

The credit rating also underlines the fact that the structure of public debt stocks is improving and favorable: only 20% of the external debt ratio, government securities on non-resident investors are on a downward path and from 57% at the end of 2011 to about 32 percent decreased in June.

Hungary's external liquidity rate is also improving, and within the external debt only 5 percent is part of short-term debt – emphasizes Fitch Ratings.

The company predicts that the government deficit will rise to 2.4 percent this year compared to the 2 percent last year, thanks to the expansionary fiscal steps, including the reduction of social security contributions.

According to Fitch Ratings, however, the government deficit will fall to 2% next year, to 1.5% in 2020, with the expected slowdown in expenditure growth.

The Hungarian government debt ratio is almost double that of the other sovereign debtors rated by the Fitch in the "BBB" range, but the company emphasizes that this figure is lower and the credit rating predicts that 73.6 per cent last year will to be. , Up to 7 percent, to 70.2 percent next year, to 68.7 percent in 2020.

The decrease is expected due to the continued surplus of Fitch on the primary government balance.

The creditworthiness of the Hungarian economy is expected to increase by 4% this year, 3.5% in the future, 3.2% in 2020.

Before announcing Friday's decision on Fitch Ratings, London's financial analysts have not ruled out that the company would improve the Hungarian tax classification.

BofA Merrill Lynch Global Research analysts at the Bank of America Merrill Lynch Bank Group predicted in their weekly forecast for emerging markets that Fitch will increase the Hungarian rating to a BBB.

The House reasoned its expectation that due to the strong macro-level indicators of the Hungarian economy, the upgrading pressure on the Hungarian sovereign rating is also high.

According to London analysts at Bank of America-Merrill Lynch, the upgrade of Hungary is "just a matter of timing" for rating agencies.

This year, the three leading international credit rating agencies had a total of six – two or two times the time to examine the ratings of Hungarian government debtors, but none of them announced the five previous times.

Finally, on 17 August, Standard & Poor & # 39; s also confirmed the "BBB minus / A-3" rating of Hungarian long-term and short-term debt denominated in foreign currency and in forint with the same unchanged positive outlook.

This year, another rating agency is conducting research on Hungary: on 23 November, Moody & # 39; s Investors Service takes the agenda of the method it uses, with a rating of "Baa3", the same as the other two companies.

Moody & # 39; s – the only one of the three global credit ratings – is not positive, but has a stable picture of the Hungarian rating.

All three major international credit assessments have been registered in Hungary since the end of 2016.


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