International Internet Magazine. Baltic States news & analytics
Thursday, 27.04.2017, 08:05
Moody's: Eastern Europe no longer faces the threat of a financial crisis
"The imminent feeling of a financial crisis has faded," Hornung said in an interview in Prague. "There are assurances that foreign banks remain committed" to the region.
The global economic slowdown has hurt Eastern Europe, which relied on foreign investment and exports for growth. While most countries in the region will fall into recessions in 2009, the narrowing premium demanded by investors for buying eastern European assets signals concern about default has been reduced, writes Bloomberg/LETA.
The Czech Republic, Slovakia, both rated A1 by Moody's, and Poland, which has an A2 rating, are "anchors in the storm," Hornung said. The three countries have retained their pre-crisis ratings, though the outlook for Slovakia was reduced to "stable" from "positive."
There remain liquidity concerns for Baltic countries and Hungary, which are mitigated by the support of international institutions, he said.
Latvia, which with Romania and Hungary received an emergency loan, had the biggest rating downgrade over the past year, with Moody's changing its assessment to Baa3, the lowest investment grade, from A2. Hungary’s rating was trimmed to Baa1 from A2.
The agency isn't concerned with budget deficits in the region, which widened after slowing growth hurt tax revenue, Hornung said. It should be "easy" for governments to consolidate public finances after growth picks up, he said.