Hungary’s economic achievements warrant an upgrade in 2016.
Falling state debt, low fiscal deficit, subdued inflation and economic growth figures all confirm that Hungarian reforms are working. In accordance with the MoU concluded with EBRD, the rate of bank tax has been reduced.

Thanks to the forint conversion of forex mortgages, the share of forex household loans has fallen to some 1 percent of total. Hungarian economic policy has been predictable and the country’s vulnerability to financial shocks has been mitigated. Markets have long priced in an upgrade: yields on Hungarian government securities are well below those of certain countries with better rankings. The Government is expecting that in 2016 not only markets and prestigious international institutions will acknowledge Hungary’s economic achievements but credit rating agencies as well.

EU regulations permit the review of rankings of EU member states only at dates announced one year in advance. In line with prior expectations, Moody’s Investors Service did not provide an update to the rating. Moody’s modified the update more than three months ago, in November 2015, when the agency changed Hungary’s rating outlook from stable to positive. At reviews that follow an announcement rating agencies traditionally do not immediately change the rating.

The next Moody’s review for Hungary is scheduled for 8 July 2016. By that time, the agency can make a decision on the basis of final macro-economic data for 2015 and the 2017 Budget Act, projected to be adopted in spring 2016.

The Ministry is expecting at least two of the three largest rating agencies to elevate Hungary to investment grade category.

(Ministry for National Economy)