We expect high interest costs, sluggish value-added tax revenues, and off-budget activities will pressure Hungary's fiscal position in 2024. However, from 2025, we project consolidation efforts--aided by economic recovery, lower interest costs, and energy bills--will contain fiscal deficits at around 4% of GDP or lower, allowing the authorities to broadly stabilize government debt in the medium term. Inflation has reduced markedly over the past months and the current account was in surplus in 2023, which has allowed the Hungarian Central Bank (MNB) to continue to cut interest rates and normalize monetary policy. We affirmed our 'BBB-/A-3' ratings on Hungary and maintained the stable outlook. On April 26, 2024, S&P Global Ratings affirmed its 'BBB-/A-3' long- and short-term foreign and local
