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

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)

Copyright © Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

News, commentary and research reports are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.