The ratings on the Republic of Hungary reflects its comparatively advanced and diversified economy, with high levels of per capita GDP for the 'BBB' category. Constraining the ratings are the government's very high levels of debt and Hungary's dependence on external financing. Standard&Poor's Ratings Services' recent downgrade of Hungary reflects the adverse impact that a deteriorating international financial and economic environment, together with the increased risk aversion of foreign investors, is having on the Hungarian economy. Limited availability of external funding, reduced external demand, and a sharp slowdown in domestic lending will bring about a steep economic correction, a contraction of economic activity, and will put pressure on private and public sector balance sheets. In late September 2008
