BUDAPEST: Standard & Poor's said on Friday it could raise its 'BB/B' ratings on Hungary if the government launches pro-investment policies and reforms, but also downgrade the country if public or external finances weaken substantially.
Earlier, S&P raised its outlook on Hungary's "junk"-rated debt to stable from negative, citing a stabilising economy, a higher growth outlook and reduced external vulnerabilities.
"We could raise the ratings if the government were to establish policies that encourage investment, while implementing its structural reform program," it said in a statement, adding that a further reduction in external debt could also lead to an upgrade.
"Conversely, we could lower the ratings if Hungary's economic recovery weakens significantly more than we currently expect; if banks accelerate their withdrawal of credit; or if external or public finances weaken materially."
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