Hungary's Orban Denies Need for Spending Cuts After April Election

Orban Rejects Austerity Claims Ahead of April Election in Hungary

Hungary's Economic Outlook and Election

BUDAPEST, Jan 31 (Reuters) - Hungarian Prime Minister Viktor Orban denied on Saturday that he will have to impose austerity measures to rein in the budget deficit if he wins an election in April, and said his right-wing Fidesz party would keep its flagship spending policies in place.

In power since 2010, the veteran nationalist is lagging a centre-right challenger in most opinion polls and battling the weakest economic stretch of his 16-year rule, with the economy nearly stagnant since Russia's 2022 invasion of Ukraine caused inflation across central Europe.

Economists say whoever wins the April 12 ballot will have little choice but to tighten purse strings after heavy pre-election spending.

Orban's Stance on Austerity

"That's a flat-out lie," Orban told a campaign rally, citing economists' view of Hungary's finances. "The state of the Hungarian economy does not require any kind of austerity."

Late last year, Orban's government raised its budget deficit targets to 5% for 2025 and the 2026 election year to make way for pre-election spending, steps which contributed to Fitch Ratings cutting its outlook on Hungary's debt to negative.

Government Spending and Economic Performance

Orban said Hungary's budget deficit, which has exceeded government forecasts in recent years, would have to be lowered "calmly, slowly and gradually" as economic prospects improve.

"We need no austerity and nothing should be taken away from the people", Orban said. He said a 3% subsidised mortgage rate or a plan to exempt mothers of two from income tax by the end of the next government cycle would remain intact if he is elected.

Impact of Pre-Election Spending

With Fidesz trying to fend off centre-right rival Tisza, Orban's government has launched a 100 billion forint ($310 million) scheme to help the restaurant industry and a 50 billion forint ($160 million) measure to curb household heating bills.

Data released on Friday showed Hungary's economy mired in near-stagnation for a third year, underperforming nearby Poland and the Czech Republic. Some analysts have lowered their 2026 growth outlook after the weak figures.

($1 = 321.48 forints)

(Reporting by Gergely SzakacsEditing by Peter Graff)