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Fitch downgrade unfounded, says ministry

A decision by Fitch Ratings on Friday to downgrade Hungary’s sovereign rating under investment grade was unfounded, the National Economy Ministry said.

"The credit rating agency’s opinion was not circumspect when it was formed nor was the timing of its decision justified," the ministry said.

The government will start talks with the IMF next week and these are expected to close successfully, the ministry said. "The agreement will certainly lead to a calming of markets and a speedy correction in the price of assets," it added.

Hungary’s fundamentals are sound and its economic position stable, it said. The 2012 fiscal deficit will be kept under 3% of GDP and Hungary’s external balance will continue to improve, it added.

The ministry also noted Hungary has a big current account surplus.

It said the government has sufficient fiscal reserves and is capable of drawing in resources from the market, thus the financing of Hungary’s state debt is not in danger.

The National Bank of Hungary’s reserves are high and rose by €2bn in the last month too, the ministry said.

An agreement reached between the government and the Hungarian Banking Association on December 15 is contributing further to positive developments in macroeconomic terms and terms of stability, it added.