S&P raises Hungary mid-term economic growth projection to 2.5%

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International ratings agency Standard & Poorʼs raised its projection for Hungaryʼs mid-term GDP growth to 2.5% from 2%, in accordance with the Hungarian government’s projection for this year, however, Hungary’s Economy Minister Mihály Varga foresees that the growth rate could reach 2.8%-2.9%, Hungarian news agency MTI said.

Standard & Poor’s put Hungaryʼs Banking Industry Country Risk Assessment (BICRA) score at 8 ˜ – the same as Croatia’s and Slovenia’s – which is at the weak end of the scale, S&P’s report on the banking sector in Central and Eastern Europe published yesterday reveals. Poland received a rating of 5 and Bulgaria 7, while the banking sectors of Slovakia and Czech Republic were given the highest scores, both 4.

Profitability of Hungaryʼs banking sector is still being squeezed by high credit losses and falling volumes, but the governmentʼs recent promise to gradually reduce the bank levy and the successful conversion of FX mortgages into forints "could improve prospects for banks", the report noted.

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