Hungarian policymakers have shifted to tighter fiscal and monetary settings to narrow the country's elevated twin deficits and level off an overheated economy. In turn, we expect domestic demand will contract this year but this will be counterbalanced by increases in exports, with marginal real GDP growth of 0.1%. A significant share of EU funds to Hungary remain withheld pending reforms; we expect their partial release toward the end of this year. We affirmed our ratings on Hungary at 'BBB-/A-3' and maintained the stable outlook. On July 7, 2023, S&P Global Ratings affirmed its 'BBB-/A-3' long- and short-term foreign and local currency sovereign credit ratings on Hungary. The outlook is stable. The stable outlook reflects our view that Hungary's small
