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JCR improves Hungaryʼs outlook to positive

Tokyo-based Japan Credit Rating Agency (JCR) has improved the outlook of Hungaryʼs long-term issuer ratings from stable to positive, the National Economy Ministry (NGM) announced yesterday.

JCRʼs foreign currency long-term issuer rating for Hungary is BBB, and its local currency long-term issuer rating is BBB+.

The outlook for both ratings has changed from stable to positive, a JCR news release shows.

JCR said Hungaryʼs financial system will improve, citing the conversion of FX mortgages into forint at the beginning of 2015 and the establishment of an asset management company (MARK) to purchase nonperforming commercial real estate loans from banks or the National Bank of Hungary (MNB).

It also said that the fiscal deficit/GDP ratio has remained below 3% since 2012 amid a gradual decline of the fiscal debt/GDP ratio.

JCR noted that Hungaryʼs external debt remains large compared to those of other sovereign governments rated in the BBB range but it shrank to less than 110% of GDP at the end of September, from 148% at the end of 2009.

As another positive factor, the current-account balance ended 2015 with a surplus estimated at more than 5% of GDP.