According to the normal schedule, the credit rating agency will re-examine Hungary’s public debt next spring.

Moody’s did not put an examination of Hungary’s public debt on the agenda at its second review date this year, on Friday. One of the three major credit rating agencies assessed Hungary a year ago, when it upgraded public debt by one notch to Baa2, and assigned a stable outlook to the rating, so this is still valid.

Moody’s already released an assessment of the Hungarian economy this week, in which they wrote that, in their view, the Hungarian government could reach an agreement with the European Commission on EU funds by the end of the year, although that is possible until then. Losing money exists as a negative risk.

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Among other major credit rating agencies, Standard & Poor’s lowered the outlook for Hungary’s credit rating to negative in mid-August, indicating a possible downgrade, and Fitch did not change the rating or outlook at the end of July. This may indicate that not only could the economic outlook deteriorate in a few weeks, but the news was about intense negotiations between the European Commission and the Hungarian government, adding to investor uncertainty.

Finance Minister Mihaly Varga also spoke in his presentation to the Association of Traveling Economists on Friday that the outlook has worsened, which is why the government is expecting higher deficit than previously planned, permanent inflation of 20 per cent and stagnation.


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