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S+P revises outlook on Hungary ‘BBB’ rating to negative

S+P Global Ratings affirmed Hungary's investment grade 'BBB' sovereign rating, but revised the outlook to negative from stable at a scheduled review on Friday.

S+P rationalised the revision citing external risks – including potential cuts to European Union funds and reduced gas flows – that could weigh on Hungary’s growth prospects and endanger post-pandemic fiscal consolidation.

Rising wage and price inflation, a volatile exchange rate, and upward pressure on borrowing costs could also narrow the government’s policy flexibility, S+P said.

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