By Stephen Nakrosis

S&P Global Ratings on Friday said it was lowering its outlook on Hungary to negative from stable, citing external pressures which could "significantly weaken Hungary's economic and fiscal outcomes."

S&P also said it was affirming its 'BBB/A-2' sovereign credit ratings on Hungary.

Among the external risks cited by S&P was energy supply, especially from Russian sources. According to the agency, "Hungary is currently seeing the largest negative effects from higher prices due to the energy crisis in Europe." S&P also said Hungary's energy import dependence is particularly high, "with the country sourcing roughly half of its oil imports and over 80% of its natural gas imports from Russia."

S&P also noted a rise in political tensions between Hungary and the European Commission, which has delayed disbursement of EU funds from the Recovery and Resilience Facility "and the triggering of the Rule of Law Conditionality Mechanism by the EC."

S&P said it could revise the outlook back to stable "if external pressures remain manageable." Hungary's ratings could be lowered if "significant delays or substantial cuts to EU funds occur or the supply of energy to the country is meaningfully constrained," S&P said.

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

August 12, 2022 17:11 ET (21:11 GMT)