Moody's has downgraded Budapest's credit rating to junk status, citing concerns over the city's liquidity and its ability to meet financial obligations by December 2025. The agency highlighted uncertainty regarding state transfers and weak liquidity as key risks. Budapest's mayor attributed the downgrade to the government's tax policies, specifically a 'solidarity tax' that strains the city's budget. Moody's also noted ongoing legal disputes over this tax and the partial freezing of EU funds to Hungary as contributing factors.