“The period between 1 October and 31 December 2019 was a jubilee period from the perspective of economic growth, since it was exactly the tenth quarter in succession in which annual GDP growth exceeded 4 percent. The international assessment of Hungarian economic policy is increasingly favourable and the credit rating agencies, and most recently the Japan Credit Rating Agency and Standard and Poor’s, for instance, have acknowledged the performance of the Hungarian economy”, the Ministry of Finance’s Parliamentary State Secretary András Tállai said in a statement to Hungarian news agency MTI.

Mr. Tállai declared that the Hungarian economy has performed well above the rate of growth of the European Union. “Economic growth was 4.5 percent in the fourth quarter of last year, more than the analysts’ forecast of 4.2 percent, making a total of 4.9 percent for the whole of the year. The data published by the Central Statistical Office confirms that the Hungarian economy is extremely strong and only minimally affected by weak (e.g. German) European growth”, he stated.

“Similarly to last year, in 2019 we again achieved a place on the podium in the competition between member states”, the State Secretary said in evaluation of the results. “Every index indicates that the Hungarian economy is one of the most competitive in the European Union, and unique with respect to the fact that all macroeconomic indices have been improving for years”, Mr. Tállai highlighted. “Such a high rate of economic growth parallel to falling sovereign debt and fiscal discipline is an extremely rare combination, since in practice these processes can usually only be reinforced or weakened to the detriment of the other”, he explained.

“The international assessment of Hungarian economic policy is increasingly favourable”, he declared, pointing out that since 2016 all three major international credit rating agencies have upgraded Hungary to investment grade category. “Last year, both Standard and Poor’s (S&P) and Fitch Ratings upgraded Hungary’s sovereign debt by one rank. In recognition of the success of our economic policy, on 14 February of this year Standard and Poor’s upgraded the investment outlook of Hungary’s sovereign debt, which is currently rated ‘BBB’, from ‘stable’ to ‘positive’, citing the possibility of a further upgrade”, Mr. Tállai said. “A positive outlook means that S&P could upgrade Hungary’s credit rating again within the next 24 months”, the State Secretary explained. “The good performance of the economy was also behind the upgrade announced by the Japan Credit Rating Agency (JCRA) on Friday”, he stated. The JCRA upgraded Hungary’s foreign currency debt from “BBB” to “A” and its forint debt from “A-” to “A”, he pointed out.

Mr. Tállai also mentioned that although the sovereign debt to GDP ratio is still over 60 percent, it has seen a rapid reduction in recent years, in addition to which the financing structure of debt has also changed dramatically. “According to the data recorded by the Hungarian State Debt Management Agency, the ratio of foreign currency debt within sovereign debt has fallen to just 20 percent from 52 percent in 2011, which has been further reduced by the repurchasing of 1 billion dollars in foreign currency debt at the beginning of this year, while Hungary’s country risk premium (CDS) has been falling at an outstanding rate for years to below the Polish level”, he added.

“These days, the decisions of credit rating agencies are generally characterised by caution, and this is one of the reasons why the fact that Standard and Poor’s has improved Hungary’s outlook to positive and the JCRA has rewarded Hungary’s economic performance with an upgrade, despite an unfavourable European outlook and the uncertain situation being caused by the coronavirus, is highly significant”, Mr. Tállai underlined.

(MTI)