Open and externally balanced economy. Political commitment to maintain fiscal deficits of less than 3% of GDP. Poor policy predictability constraining medium-term growth prospects. Fiscal targets vulnerable to economic slowdown. Still-high fiscal and external liabilities, despite the shift of the current account into surplus. Our ratings on Hungary reflect our assessment of its still-high fiscal and external liabilities and recurrent use of unorthodox, and possibly unsustainable, economic policies against its success in reducing fiscal deficits to less than 3% of GDP and containing external liquidity pressures by achieving current account surpluses. The government's unorthodox policies, including exceptional measures applied to the financial sector, could erode the country's medium-term growth potential. This could eventually undermine the government's efforts to sustainably reduce
