Moody’s did not update Hungary’s sovereign rating, although it was on its EU sovereign rating calendar on Friday, the ratings agency reported. Moody’s rates Hungary “Ba1”, one notch below investment grade. Analysts told MTI earlier in the week that Moody’s was likely to upgrade Hungary this year, but probably not last Friday.
Moody’s next lists Hungary for an upgrade on July 8, then on November 4 in its calendar, but the agency is under no obligation to upgrade on these dates. The other big international rating agencies have also put Hungary down for a review in their calendars, Standard & Poor’s for March 18 and September 16 and Fitch Ratings for May 20 and November 18. London-based Morgan Stanley’s analysts said Moody’s was likely to administrate an upgrade in July in response to Hungary’s economic policy environment becoming more predictable than before. “2016 could be the year when the relationship between the Hungarian government and the banking system can normalise”, it said. The Hungarian Economy Ministry said it was expecting at least two of the three largest rating agencies to elevate Hungary to investment grade category in 2016.
Economist Magdolna Csáth said that Hungary should be in a higher grade than in the current speculative band, considering its macroeconomic indicators. It is obvious that other factors weigh in, such as “psychological and political factors or the business environment”, she told public news channel M1. Although she added that Hungary was not a great performer in terms of GDP in the region: the Czech Republic is six grades and Poland and Slovakia are five grades higher in their ratings, she said. Moody’s has held out on its review due to uncertainties in the global economy, such as changes in China, the Greek crisis or the European migrant crisis. Hungary is very vulnerable to these economicforeign trade trends, Magdolna Csáth said.