The unclear outcome of the first round of the Hungarian election will not have an immediate impact on the country's sovereign rating, ratings agency Standard and Poor's reported on Monday. The agency added, they will take further ratings steps in the light of the new Government’s strategy on how to reduce Hungary’s dual deficit. The ratings agency has downgraded Hungary's ratings outlook to negative earlier this year in January 2006, reflecting the increased downside risks to Hungary's current account deficit.
We see the news as neutral, as the agency’s step reconfirms the high market expectation for a new credible budget path.