Hungary Launches 3% Business Loans Ahead of Tight Election

Hungarian Prime Minister Viktor Orbán has launched a new cheap loan program for small and medium-sized enterprises (SMEs) offering a fixed 3% interest rate and loans up to 150 million forints to stimulate the economy ahead of a challenging election. This initiative is part of a broader economic strategy that includes subsidized housing loans and potential tax cuts for businesses and families, aiming to support growth despite Europe’s economic difficulties and high inflation. The government will allocate substantial funds to back this program, making loans accessible and predictable for SMEs through the Széchenyi Card system. While the stimulus measures are expected to boost consumption and economic growth to around 3% next year, analysts warn they could also increase fiscal risks, with Hungary’s budget deficit potentially exceeding 5% of GDP in 2026. Orbán emphasized the government’s commitment to maintaining a growth target of around 3.1%, despite the challenging environment marked by the war in Ukraine and high energy prices. The pre-election spending spree is viewed as both a political move to regain voter confidence and a potential source of future austerity once the election passes.