The Hungarian government has announced an expenditure-focused reform plan, which it estimates will bring about a fiscal consolidation of more than 7% of GDP over 2012-2014. We estimate that the government will achieve only 60% of this targeted fiscal adjustment. However, we also expect that regardless of our expectations about what the government might achieve, the reform plan should be sufficient to stabilize the net general government debt burden at around 65% of GDP over the forecast horizon. In our view, the plan should help protect Hungary against potential deterioration of its economic growth prospects brought on by what we view as the government's ad-hoc and temporary taxes on some business sectors. We are therefore affirming the 'BBB-/A-3' foreign and
