It is entirely unjustified that with the Hungarian economy booming and the country’s public debt falling, credit rating agency Moody’s has left its sovereign debt rating unchanged, Szajlai writes.
Although Hungary already has an investment-grade rating at all three major credit rating agencies – Moody’s, Standard&Poor’s and Fitch – there is still ample room for advancement.
Especially since Hungary already meets every critical economic and financial criterion. Moody’s analysts may not have seen the latest Hungarian indicators – five percent economic growth, falling public debt – so they probably relied on older data when they left the country with a Baa3 rating. But even the previous macroeconomic data has been good, so Hungary should at the very least have deserved a positive outlook.
The Hungarian economy is very dynamic: the country’s banking system has an extremely healthy capitalization, lending to both households and businesses is growing faster than anticipated, as are private savings. Every single sector of the real economy contributes to the growth, there is no sector dragging it down.
Public debt is being reduced faster than expected, the current account balance is consistently positive while central bank and government policy is in harmony.
Now, Moody’s, we didn’t expect a Christmas gift from you, but performance should be recognized. Especially when not doing so gives the impression that the venerable credit rating agency is behind the curve in both economic trends and market pricing.