The ratings on the Republic of Hungary benefit from our view of its comparatively advanced economy and its close economic and trade integration with the EU. We expect sustained consolidation efforts to contain the deterioration in the Hungarian government deficit despite the downside pressures on the economy. The gradual normalization of domestic and international bond markets has lessened dependence on the funding package totaling €20 billion from the International Monetary Fund (IMF) and the EU, to which Hungary has had access since November 2008. We consider there is still a risk that financial sector contingent liabilities will materialize, but that the stabilized exchange rate and the gradual improvement in the availability of external funding will provide some relief. Standard&
