Standard & Poor's Ratings on Friday affirmed the BBB-minus/A-3 level rating of the Hungarian government's long-term and short-term foreign and local currency debt obligations with an investment recommendation.
Along with the rating confirmation announced in London on Friday evening, the international credit rating agency also left the stable outlook for the rating in effect.
The other two global credit rating agencies, Fitch Ratings and Moody's, also place Hungary's sovereign rating in the investment grade, but it is one step higher than the Standard & Poor's rating.
The Ministry of National Economy responded to the decision in a statement, noting that the reports of the three most important credit rating agencies all reflect a high degree of confidence in Hungary in Iran. As they say, the stability and resistance to crises of the Hungarian economy lies behind it. Hungary's economic growth is above the EU average, outperforming the economic performance of Belgium, France, Italy, the Netherlands, Romania, Latvia and even Germany, among others.
Although we are going through a difficult period, there are more and more positive signs that we can talk about a turnaround in the Hungarian economy.
According to the announcement, retail sales in August rose by more than 4% year-on-year, and this dynamic is already higher than this year's expected GDP growth of 1.5%. This means that consumption of goods clearly leads to an increase in overall economic performance. At the same time, tourism is on the rise: in the first eight months of the year, the number of guest nights rose by 5.5 percent compared to the same period of the previous year. “This also indicates that more and more people, more and more families can go to relax, even on weekends.” -. Highlighted.
According to the NGM report, there are three main factors contributing to the recovery of the local economy:
- High employment rates: About 4.7 million people are working, that is, in the face of the ongoing crisis, the government has not only protected jobs, but more and more people are working, and there is almost full employment.
- Real wages rise dynamically: wages are growing at a rate of 14 percent, so the minimum wage is already 634,000 HUF. This means nothing more than that workers currently earn 77,000 HUF more than they did a year ago. Real wages have been increasing continuously for a year, and in August salaries were 9.4 percent higher than last year.
- Reducing inflation to a low level: The government reduced inflation and kept it at a low level – in September, inflation reached 3 percent. And it will remain so.
The government's goal is for the Hungarian economy to grow by 3-6 percent, the foundations of which, according to the Ministry of National Economy, are created through economic neutrality.
The forint exchange rate weakened in the hours before the decision, although the majority of analysts did not expect a change in the rating.
