August 17, 2018 / 8:50 PM / in 8 months

S&P affirms Hungary's sovereign rating

(Reuters) - Ratings agency Standard & Poor’s affirmed Hungary’s “BBB-/A-3” credit rating on Friday, citing the country’s surplus external position and substantial net foreign direct investment.

"Hungary's strong external profile, its resilient export-driven economy, low private sector debt levels, and the flexible exchange rate regime support the sovereign ratings," the S&P said. []

The rating agency kept its outlook unchanged at positive.

Hungary’s GDP growth rate would peak this year at 4 percent, supported by domestic demand, employment gains and the recovery of domestic credit growth, S&P said.

“The Hungarian economy has been expanding dynamically for some time now, while the budget deficit has been below 3 percent of GDP for even longer. Moreover, the government targets a balanced budget within a few years,” analysts at local brokerage Erste Investment said in a note on Friday.

Hungary’s government expects economic growth to rise to 4.3 percent this year and 4.1 percent in 2019.

Reporting by Gergely; Szakacs in Budapest and Karina Dsouza in Bengaluru; Editing by Sriraj Kalluvila

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