On Oct. 12, 2004, Standard&Poor's Ratings Services affirmed its 'A-' long-term and 'A-2' short-term foreign currency sovereign credit ratings on the Republic of Hungary, in view of the country's good economic prospects and the government's moderate external debtor position. At the same time, the 'A' long-term and 'A-1' short-term local currency ratings on the sovereign were also affirmed. The outlook is stable. The affirmation reflects healthy prospects for Hungary's competitive economy and export sector, and the sovereign's moderate public sector external debt burden. It also reflects the government's commitment to gradual fiscal consolidation. The ratings on Hungary remain constrained, however, by the need to reduce the general government deficit and debt levels, which compare unfavorably with the sovereign's
