Ratings agency Moody’s is comfortable with Hungary’s A3 debt status, but the country’s economic outlook and large foreign currency-denominated private debt pose a risk, Dietmar Hornung, senior analyst at Moody’s Investors Service in Frankfurt, told Reuters on Wednesday.
“We are at the moment completely fine with the rating, with the rating level A3 and also with the negative outlook,” Hornung told Reuters.
Moody’s lowered Hungary’s local and foreign currency government bond ratings to A3 from A2 in November after the country was forced to seek the financial help of the IMF and the European Union to avert crisis.
Hornung said Hungary had several weaknesses, including the dependence of its export-driven economy on Western European markets, its large debt and also the currency mismatch due to the country’s large stock of foreign currency denominated debt.
“Our concern is that the economic strength and government financial strength of Hungary will be impaired in a way that’s not compatible with the current rating,” Hornung said. “The whole region, central Europe is affected by the global crisis in a quite severe way, and Hungary is, in the peer group of the CE4 countries, as our rating indicates, the weakest country,” he told Reuters. (MTI-Econews)