Standard & Poor’s places Hungary on negative credit watch

Ratings agency Standard & Poor’s has placed Hungary’s ‘BBB-/A-3’ foreign- and local-currency sovereign credit ratings on CreditWatch with negative implications, Standard & Poor’s announced on Saturday.

The ratings agency said that it had placed Hungary on negative credit watch because it believes the country’s unpredictable policy moves have weighed on its medium-term growth prospects.

"The rating action reflects our view that a more unpredictable policy environment, stemming from a weakening of oversight institutions and some budgetary revenue decisions, will have a negative effect on economic growth and government finances," Standard & Poor’s said in a statement. The agency said downside risks to Hungary’s creditworthiness were increasing as the external financial and economic environment was weakening.

Standard & Poor’s added it was likely to decide on Hungary this month "pending further information from the Hungarian government regarding how it will address the ongoing economic challenges."

On Friday Fitch Ratings said it revised the outlooks on Hungary’s long-term foreign and local currency Issuer Default Ratings (IDR) to Negative from Stable. It affirmed the ratings at ‘BBB-’ and ‘BBB’, respectively.