S&P upgrades Hungary

As Standard and Poor’s lifts Hungary’s rating to just below investment grade, conservative commentators believe Hungary should persevere with its fiscal discipline, with the likelihood that two major rating institutions out of three may raise its rating to investment level before long.

S&P aligned its grade for Hungary with those of Fitch Ratings and Moody’s Investors Service, both of which place Hungary’s sovereign credit one step below investment grade with a stable outlook.

In Magyar Hírlap, Csaba Szajlai recalls that although Hungary was downgraded below investment level under the Fidesz government in 2011, that was only the last step in a long process which had started and unfolded under previous left-liberal governments from 2004 to 2010. Losing trust is an easy job, he says, but rebuilding it is all the more difficult. He understands why the government and the National Bank have urged rating institutions to upgrade Hungary’s rating to investment grade but recommends that they be patient. Another upgrade could come before the end of the year.

In Magyar Nemzet, Gergely Kiss suggests that upgrading to investment level can now be expected from the other two main credit rating firms in the autumn or early next year, but advises more predictability in decision making for that to happen. For instance, he thinks it would be advisable for the government to submit the first draft of next year’s budget to Parliament as early as next month, along with the yearly convergence plan to be sent to Brussels.

Tags: credit-rating, debt