The ratings on the Republic of Hungary reflect its comparatively advanced and well-diversified economic and export structures, as well as solid medium-term growth potential, supported by export and investment growth, although this will be restricted by ongoing fiscal consolidation efforts. The ratings remain constrained by the desolate state of Hungary's public finances, as evidenced by very high general government deficits and quickly rising government debt ratios. Fiscal deficits also contribute to consistently high current account deficits, and this combination poses a risk to macroeconomic stability. Following its reelection in April 2006, Hungary's center-left government admitted that public finances are in a considerably worse condition than previously declared and has significantly revised upward its budget deficit targets for 2006-2008. At the
