The Japan Credit Rating Agency (JCRA) has kept Hungary in investment-grade category and it raised the country’s outlook from stable to positive.

The Japanese rating agency is one those few that maintained Hungary’s investment-grade status even in the midst of the global economic crisis. In the statement released together with the rating decision the agency notes that the Hungarian economy has been on a growth path, and steady growth has been accompanied by a budget deficit of below 3 percent and falling state debt; accordingly, the economy grew without incurring more debt. The massive surplus of the current account balance is also mentioned among positive factors. Thanks to that, as well as to the reduction of private and public sector debt and the forint conversion of forex loans, Hungary’s vulnerability to external financial shocks has been mitigated.

According to the rating agency, economic growth may in the next two years be boosted by the further increase in household consumption, as a result primarily of the improving employment situation, low inflation, higher wages and tax cuts.  The JCRA is also expecting that the Government’s housing programme, EU funding and the MNB’s Funding for Lending Scheme will also bolster investments. Growth risks, such as the VW scandal and China’s slow-down have hitherto had no substantial negative impact on the Hungarian economy, the report concluded.

The JCRA, founded in 1985, make credit rating reports and economic analyses mainly for Japanese investors.

Upbeat analyses and improving ratings issued by international institutions on the Hungarian economy also confirm that Hungarian reforms are working and that justifies the expectation of favourable rating decisions by the three largest rating agencies this year.

(Ministry for National Economy)