BUDAPEST, March 26 (Reuters) - Hungary's fiscal position has improved but there are risks to the 2010 deficit target and further action will be needed if existing budget buffers prove insufficient to cover risks, the IMF said on Friday.
In a detailed report on the February review of Hungary's performance, published on Friday, the IMF said continued improvement in fiscal sustainability will be "essential".
It said strict cost control, a cautious use of reserves and the saving of windfall revenue gains was needed to meet targets.
"The underlying fiscal position has been strengthened, but more needs to be done to put debt firmly on a declining path," the IMF said.
"Continued adherence to prudent policies will be essential if Hungary is to ensure macroeconomic stability and return to sustained growth."
"Government and external debt levels remain high and a deterioration in external conditions or policy slippages could hinder Hungary's stabilization efforts."
(Reporting by Krisztina Than; Editing by Ron Askew)