Hungarian Prime Minister Viktor Orban's expectations of a robust economy boosting his Fidesz party towards victory in the 2026 election face challenges due to rising inflation, declining household morale, and a drop in the birth rate. The recent caution from the central bank on inflation risks adds to the difficulties faced by the experienced leader, with concerns of potential U.S. tariffs impacting the export-driven Hungarian economy.
Following Russia's 2022 invasion of Ukraine, Hungary grappled with the highest inflation surge in the European Union, creating ongoing worries for families. Balazs Szent-Ivanyi, a political economist at Aston University focusing on central Europe, noted that living standards in Hungary have not seen such a decline since Fidesz came to power in 2010. Despite this, Orban's party could leverage its media influence to shape public opinion favorably before the election.
Economists surveyed in January doubted Hungary's economy would achieve the 3.4% growth targeted by Orban for this year, with forecasts indicating a more modest 2% growth. The European Commission's forecast of 1.8% growth would mark the weakest three-year period leading up to a national election during Orban's tenure.
Despite plans to increase family benefits and economic stimulus measures, Hungary's birth rate remains at a decade-low, posing a challenge for Orban as opposition parties like Peter Magyar's Tisza party gain support. Capital Economics analyst Nicholas Farr highlighted the real possibility of Orban losing his first election since 2010.
Orban's tactics to invigorate the economy with tax benefits, business support, and social benefits led to his previous election success in 2022. However, with currency challenges and budget risks, escalating spending could provoke market repercussions. Credit rating agencies have cautioned about potential downgrades if state finances worsen.
To maintain his political standing, Orban aims to boost public sentiment and the economy towards the election, exploiting his communication prowess and institutional control. Despite uncertainties, Orban's hope hinges on an improved economic outlook and public sentiment as the election nears.