Moodyʼs also affirmed the cityʼs Ba1 rating, Hungarian news agency MTI reported. Moodyʼs justified the action citing “the improving Hungarian operating environment” and “the strong correlation between sovereign and sub-sovereign credit risk”, the news agency added.
The ratings agency noted that about 90% of Budapestʼs operating revenue last year was from intergovernmental revenue, in the form of shared taxes and central government transfers that are set at the national level, MTI said.
Moodyʼs raised the outlook on Hungaryʼs “Ba1” sovereign long term issuer rating, one notch under investment grade, from “stable” to “positive” in a scheduled review on Friday evening. On Saturday, Hungary’s National Economy Ministry said that Moody’s rating change shows that “Hungarian reforms are working”.
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