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UPDATE 1-Moody's raises Hungary's rating by a notch to 'Baa2' on strong growth rebound

·1-min read

(Adds background on Hungary, details from Moody's note)

Sept 24 (Reuters) - Ratings agency Moody's on Friday raised Hungary's sovereign credit rating to 'Baa2' from 'Baa3', saying its economic resilience is underpinned by the strong growth rebound throughout the first half of 2021.

"The projected strong growth rebound and medium-term outlook over the coming years will support fiscal consolidation and reduction in the government's debt burden", the agency added in its statement

The country's recovery from the pandemic has gained momentum from the second quarter onwards, helped by strong fiscal and monetary stimulus.

The agency noted that Hungary's medium-term outlook until 2025 is supported by high investment rates, reflecting its attractiveness to foreign investors, and also the government's growth-friendly economic policies.

Inflation, however, has also accelerated, prompting the Hungarian central bank to start a rate hike cycle, making it the first EU country to begin monetary tightening. The bank has raised interest rates four times since June, with the latest hike announced on Tuesday.

Moody's changed Hungary's outlook to stable from positive. (Reporting by Richard Rohan Francis; Editing by Vinay Dwivedi)

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