BUDAPEST, Feb 5 (Reuters) - Hungary's government plans to provide free grants to hundreds of thousands of pensioners in rural areas to renovate their homes, announced Prime Minister Viktor Orban on Wednesday. This initiative is strategically timed as Orban gears up for elections scheduled in approximately a year.
The proposed scheme is specifically aimed at a demographic that has historically been a core supporter of the nationalist Fidesz party led by Orban. The party is currently facing notable political and economic hurdles, highlighted by sluggish economic growth.
Orban's administration aims for a 3.4% economic growth rate this year, although experts view this target as overly optimistic. The Prime Minister anticipates that growth can be stimulated through various measures, including housing subsidies, salary and pension increments, and financial support for small enterprises.
Despite these efforts, there are concerns among investors about the potential negative impact of the fragile economy leading to populist spending policies akin to those that secured Orban's re-election in 2022.
Orban detailed in a Facebook post that the government intends to allocate a 3 million forint ($7,683) grant per individual in rural regions to facilitate home renovations. The Prime Minister also mentioned in a separate post that the program's total cost over two years would amount to 90 billion forints, specifically targeting pensioners residing in villages with populations under 5,000, a demographic strongly supportive of the Fidesz party.
Orban is now encountering his most significant political contest since assuming power in 2010, particularly against the center-right Tisza Party that emerged in Hungarian politics recently. Recent polls unveiled in January indicate a slight edge for Tisza over Fidesz. According to a survey conducted by the Publicus Institute think tank from Jan. 20-29, Tisza garnered 42% support among decided voters, surpassing Fidesz with 37%.