On Sept. 24, 2007, Standard&Poor's Ratings Services affirmed its 'BBB+' long-term and 'A-2' short-term sovereign credit ratings on the Republic of Hungary following sustained progress toward fiscal consolidation. The outlook is stable. At the same time, Standard&Poor's affirmed its 'A+' transfer and convertibility assessment on the sovereign. The ratings on Hungary are supported by a comparatively wealthy economy, one that is well integrated with the EU and has well-diversified economic and export structures. These strengths are offset, however, by very high fiscal deficits and high and rising government debt levels, as well as a large external debt burden. Years of public sector profligacy have undermined the credibility of Hungary's fiscal policy, culminating in a general government
