Hungary's Economic Growth to Accelerate

By Gergely Szakacs and Anita Komuves

BUDAPEST (Reuters) – Hungary's economic growth is expected to significantly accelerate in the first half of next year, driven by a housing boom backed by government initiatives, according to Prime Minister Viktor Orban's comments on public radio on Friday.

Having been in power since 2010, Orban has faced challenges reviving Hungary's economy following last year's downturn and a surge in inflation that exceeded 25% in the first quarter of 2023, the highest in the European Union.

He revealed that the upcoming measures, set to be announced in the coming weeks, will involve channeling long-term savings into the housing market through regulatory changes. Government officials have indicated that these plans might inject 300 billion forints (approximately $817.53 million) into the housing market by freeing up savings held in private pension funds.

"We already have the framework of the specific measures emerging. We will give a massive boost to the Hungarian economy," Orban stated, noting that the growth pace in the first half of next year would be "very spectacular."

Ahead of a parliamentary election scheduled for the first half of 2026, Orban has committed to doubling tax benefits for families and executing a significant capital injection program for small businesses in 2025, alongside substantial wage increases.

Since the COVID-19 pandemic, Hungary's budget deficit has been near 7% of gross domestic product, with the ratings agency Moody's projecting a shortfall of 5.5% of GDP for this year, despite recent deficit reduction efforts. The government aims for a 4.5% deficit this year, and Orban reaffirmed his commitment to reducing the deficit next year, irrespective of the planned stimulus measures.

"We will have to secure the funding for the programs I have mentioned from the internal resources of the Hungarian economy in a way that we continue reducing the debt and the budget deficit," Orban affirmed. "This is possible."

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