Hungary Escapes Junk Debt at S&P on ‘Ad Hoc’ Steps

Hungary escaped a sovereign credit rating downgrade to junk at Standard & Poor’s after the government announced plans to levy temporary taxes on some industries and use private pension funds to patch budget holes.

S&P maintained Hungary’s rating at BBB-, the lowest investment grade, the ratings company said today. The outlook remained negative because the government’s measures are “largely ad hoc” and fail to address the “structural deficit,” which may lead to the shortfall rising to 6 percent of output by 2014 from a targeted 2.94 percent next year.