Hungary ’s commitment to cut the budget deficit hasn’t removed the threat to its investment-grade debt rating because the government needs to clarify its economic policies, Standard & Poor’s said. Moody’s Investor Service, also mulling a downgrade, said fiscal plans will steer its decision.
Russia sees a high probability that neighboring Ukraine will default. Standard & Poor’s says that outcome is likely. Even Ukraine’s acting president calls the country’s plight a “pre-default situation.”
Polish Prime Minister Donald Tusk won “breathing space” with a four-year fiscal plan that uses as much as 36 billion zloty ($11.9 billion) of asset sales and cash management savings to defer tax increases and spending cuts.
Egypt’s inability to rein in spending drove the risk of holding the nation’s bonds above Dubai’s for the first time in a month and prompted Standard & Poor’s to cut the rating on the most populous Arab country.
Poland is capable of cutting its budget shortfall to 3 percent of gross domestic product by 2012 and will submit plans to the European Union to do so this week, Economic and Monetary Commissioner Olli Rehn said today.
The Polish government’s plan to curb borrowing next year using asset sales and an increase in the value-added tax is “supportive” for Standard and Poor’s A- currency rating for the country, Trevor Cullinan, a London-based credit analyst for the ratings company, said by phone today.