BUDAPEST, Feb. 16 (Xinhua) -- The Hungarian National Bank (MNB) welcomed the latest upgrade of Hungary to BBB by international rating agency Standard and Poor's (S&P Global Ratings) in a statement published on its website very late Friday night.
"Hungary deserved the latest upgrade, which is supported by the improvement of a broad range of macroeconomic indicators," the central bank said. "S&P Global Ratings was the first of the big three rating agencies to raise the sovereign rating to two notches over the investment grade threshold," MNB added.
Hungary's annual gross domestic product (GDP) growth in 2018 was 4.8 percent, according to official data published here on Thursday.
"MNB, in line with its legal mandate, continues to endeavor towards the success of the national economy and the insurance of stability with all of the tools at its disposal, and it trusts that the rest of the rating agencies will acknowledge the sustainable improvement in the fundamentals of the Hungarian economy following the decision by S&P Global Ratings," it detailed.
The rating agency raised its long- and short-term foreign and local currency sovereign credit ratings on Hungary to "BBB/A-2" from "BBB-/A-3".
"The upgrade reflects Hungary's sound growth prospects, supported by high private savings and real wage gains sustaining domestic demand, as well as the ongoing expansion of export capacity in the automotive and services sectors," S&P Global Ratings said in its explanation.
"While we expect growth to slow toward 2 pct by 2021, we think Hungary's small open economy will be able to weather a period of weaker external demand, as well as the expected decline in EU funding," S&P Global Ratings underlined.
"The ratings are supported by Hungary's resilient export-driven economy, strong external profile, low private-sector debt, and the flexible exchange rate regime. Relatively weak checks and balances between government branches, moderate wealth levels, and high public debt are key constraints on the ratings," S&P Global Ratings concluded.
Moody's and Fitch both assign Hungary the lowest investment grade rating. Moody's has a "stable" outlook on the rating, but Fitch's outlook is "positive".
