We believe that key components of the government's plan to consolidate public finances could prove harmful to Hungary's medium-term growth prospects. We are therefore revising the outlook on Hungary to negative from stable. We are also affirming the 'BBB-/A-3' foreign and local currency sovereign credit ratings. On July 23, 2010, Standard&Poor's Ratings Services revised its outlook on the Republic of Hungary to negative from stable. At the same time, we affirmed the long- and short-term 'BBB-/A-3' foreign and local currency sovereign credit ratings. The transfer and convertibility assessment on Hungary remains at 'A-'. The ratings on the Republic of Hungary factor in our view of the positive effect that previous Hungarian governments' fiscal consolidation programs have had on
