BUDAPEST – Hungarian Prime Minister Viktor Orban on Saturday announced a new cheap loan programme for small and medium-sized businesses at a fixed 3% interest rate, launching Monday, as he gears up for what could be his most challenging election yet.
Facing a stagnant economy and persistent inflation, Orban’s government is ramping up pre-election stimulus measures — including subsidised home loans and potential business tax cuts — to regain voter confidence.
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Under the new scheme, businesses can access loans up to 150 million forints ($454,250) at the subsidised rate. The National Bank of Hungary noted that recent fiscal incentives — from wage hikes to housing support — could raise household income by 1.5% of GDP by 2026.
However, analysts warn the pre-election spending spree could inflate fiscal risks, with Hungary’s budget deficit possibly exceeding 5% of GDP in 2026. Economists project a modest 0.6% growth this year, improving to around 3% next year, driven by consumer spending fuelled by government stimulus.
Despite the short-term boost, experts caution that post-election austerity may be inevitable once the spending wave subsides.