Posted on 11/25/2011 1:21:27 PM PST by bruinbirdman
Moody's has cut Hungary's government bond rating to "junk", citing high debt levels, weak growth prospects and uncertainty about its ability to meet fiscal goals, in what the government called part of "financial attacks" against the country.
The rating agency cut the country's rating by one notch to Ba1, below investment-grade, with a negative outlook hours after rival Standard & Poor's held fire on a flagged downgrade on news of Budapest's planned talks on getting international aid.
Hungary returned to the International Monetary Fund and the European Union last week after the forint currency fell to record lows against the euro in the wake of a warning by S&P that Hungary could lose its investment-grade credit score.
The forint fell 1pc from its Thursday close in the domestic market to 315.80 versus the euro in early trade on Friday. It hit a record low at 317.90 versus the euro on Nov. 14 according to Reuters data.
Moody's cited rising uncertainty about Hungary's ability to meet fiscal goals, high debt levels and what it called increasingly constrained medium-term growth prospects as the main reasons behind the downgrade from Baa3.
"Moody's believes that the combined impact of these factors will adversely impact the government's financial strength and erode its shock-absorption capacity," it said in a statement.
"The rating agency's decision to maintain a negative outlook on Hungary's ratings is driven by the uncertainty surrounding the country's ability to withstand potential event risks emanating from the European sovereign debt crisis."
The Economy Ministry said in a statement on Friday that the downgrade was professionally unfounded and considered it to be what it called "financial attacks against Hungary".
The government cited its commitment to keep budget deficit below 3pc of economic output next year, 1pc of GDP worth of reserves
(Excerpt) Read more at telegraph.co.uk ...
The Honkies are going hungry!
Buy...buy...buy while the pricing is hot! /s
I wish I was 30 years older, so at least I’d have a nice life to look back on, instead of the bleak landscape to look forward to.
They are not alone. I think Portugal has junk rating too.
gotta agree...this is the first time I’ve enjoyed being 63; I saw the best of it...a heck’ve ride. Saw the terrible sixties, missed Vietnam, five years of college, good jobs, and now it’s all ending...and so am I.
Gonna get my gun, sit on on my front porch, and watch the world blow up.
It’s gonna be a heck’ve party.
I see that Hungary & Obama's vision are twins. - Attacking the independent ratings agencies will certainly get them nowhere.
I’m sad to hear this. Hungary is going to have lot’s of company.
Yup. Portugal got downgraded earlier this week.
It’s hard to grow spiritually in nonstop good times - think of future challenges as a silver lining...
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