Hungary’s private pension shocker

Did we mention that Hungary’s government looks to be intent on nationalizing the country’s private pension funds in order to shore up its accounting? Judging from Bloomberg a couple days ago, this isn’t likely to be the most popular PR move of the year.

Hungary, which received an international bailout two years ago, plans to shift 3 trillion forint ($14 billion) of private pension-fund savings into the state budget to help reduce the deficit and public debt. Credit Agricole Cheuvreux SA said today investors should curb holdings of Hungarian equities. Fitch Ratings said today it may cut the country from BBB, the second- lowest investment grade because of the plan.
“Changes to the pension system have been received very badly and we do not expect there will be an improvement in the sentiment any time soon,” emerging-market strategists led by Shahin Vallee at BNP Parbias SA in London, wrote in a report today. “Euro-forint is approaching 280 and we expect some further upward pressure.”


One response to “Hungary’s private pension shocker

  1. Pingback: Fitch downgrades Hungary | CIJ Blog

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