The Japan Credit Rating Agency (JCRA) has revised Hungary’s foreign currency and forint denominated debt ratings, citing the stable system of public finances, the significant reduction in the sovereign debt, and the government’s successful economic policy. Following the outlook upgrade announced by Standard and Poor’s last week, the move by the Japanese rating agency also indicates that the performance of the Hungarian economy is also being increasingly acknowledged abroad.

The JCRA revised Hungary's rating of foreign currency denominated debt from “BBB+” to “A-”, while the rating for forint denominated debt has been increased from “A-” to “A”. As the reasons for its favourable decision, the rating agency cited amongst others the around 5 percent growth of the Hungarian economy, the improvement in productivity, the increase in investment, and the continuous increase in wages. The institute wrote with acknowledgement concerning the continuous improvement of the country’s financial situation, the stability of the financial system, and the high capital adequacy indices.

Also behind the positive decision on the part of the rating agency lie the low deficit, the continuously decreasing debt, and the country’s resistant, export-orientated economic performance. The JCRA expects the Hungarian economy to continue to grow at an annual rate of 3-4 percent in the upcoming years.

Previously, the Japanese rating agency upgraded the outlook with relation to Hungary’s sovereign debt from stable to positive in 2017.

(Ministry of Finance)