Uncreditable credit rating agencies

S&P has affirmed  Hungary’s BB Rating. BB means “non-Investment grade”, commonly called “junk”.

I think the best thing is just to reblog a post of mine I wrote in last December.  The changes since then are as follows:

  1. Hungary produced the highest GDP growth (3.9%) in Europe in the second quarter of 2014
  2. the yields on Hungary’s bonds have fallen even more (1.4% on the 3-month T-bills).

Politics in Hungary

Yesterday’s news was that the credit rating agency Fitch affirmed Hungary’s credit rating in the “junk grade”.    They really didn’t bother much about the steadily improving macroeconomic figures Hungary has been producing recently (the budget deficit being firmly below 3%, GDP growth becoming stronger than  expected, a big trade balance surplus, Hungary’s stopping the growth of its public debt, the slightly decreasing unemployment rate while the  economic activity is increasing (!), the all time low inflation rate or the steady demand for Hungary’s treasury bills at an all time low base rate, etc.).  The key sentence in their report must have been this: “Fiscal discipline contrasts with unpredictable economic policies, especially with respect to the banking and utilities sectors.”  In other words:  the Financial Empire strikes back.

Where’s the red bean? (aka the shell game)

Let’s note that the big (US-based) credit rating agencies (Fitch, Standard and Poor’s and Moody’s) …

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Hungary’s GDP growth highest in the EU

Hungary has embarked on a period of economic growth which could put the country among the fastest-growing European Union member states

Prime Minister Viktor Orban said on the 25th of August,  addressing the annual meeting of Hungarian mission leaders.


Today’s news is that the Central Statistical Office (KSH) has confirmed their preliminary GDP growth figure: Hungary’s gross domestic product increased by 3.9% in the second quarter of 2014 compared to the corresponding period of the previous year.  That’s 0.8% on a quarterly basis.

Now this is the highest growth in the European Union.

KSH  has also revised the first quarter GDP growth data  today and they have upped  it to 3.7% year-on-year from 3.5% y/y.

Here’s the break-down of the growth data by sectors (on a quarterly basis):



Analysts warn that the growth will slow in the second half of the year because of the economic impact of the EU-Russia conflict. However the expected yearly growth of the Hungarian economy in 2014 is still 3.1%.

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