Moody's raises Hungary's outlook to 'positive', maintains rating

Sept 25 (Reuters) - Ratings agency Moody's on Friday raised Hungary's sovereign rating outlook to "positive" from "stable," citing the strong recent performance of the economy and improvements in the country's domestic and external debt position.

Moody's said while the coronavirus crisis has impacted the country's economy, improvements in its fiscal and debt conditions since the agency's last rating action in November 2018 are expected to resume next year.

"The impact on Hungary's credit profile has been more limited than elsewhere," the agency said https://www.moodys.com/research/Moodys-changes-Hungarys-outlook-to-positive-affirms-Baa3-ratings--PR_432474.

Hungary's gross domestic product (GDP) shrank 13.6% in annual terms in the second quarter, the deepest contraction on the EU’s eastern flank, and the recovery is expected to be slower than previously anticipated.

Moody's said it expects real GDP growth for Hungary to return to potential from 2022, supported by strong investment in the past few years and the expectation that most large scale foreign direct investment projects will be implemented.

Hungary's rating was affirmed at "Baa3".

(Reporting by Nilanjana Basu and Nishara Karuvalli Pathikkal in Bengaluru; Editing by Aditya Soni)

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