Hungary election winner will have to rein in social spending, S&P says

BUDAPEST, March 24 - The winner of Hungary's April 12 parliamentary election will have to take steps to rein in social spending to shore up state finances amid risks to an economic recovery from the global energy price shock, S&P Global said. Read more at straitstimes.com.

BUDAPEST, March 24 - The winner of Hungary's April 12 parliamentary election will have to take steps to rein in social spending to shore up state finances amid risks to an economic recovery from the global energy price shock, S&P Global said.

Hungary's budget deficit reached nearly 40% of the full-year target in the first two months of this year amid heavy spending by right-wing Prime Minister Viktor Orban ahead of the ballot, where the veteran leader faces the toughest challenge to his 16-year rule.

S&P said no apparent re-balancing of the medium-term fiscal position after the elections, in combination with rising external pressures, could trigger a ratings downgrade.

"We would anticipate that the incoming government after the 2026 election (regardless of the government composition) will need to engage in consolidation efforts to rein in the trajectory of social spending," S&P told Reuters in an emailed reply to queries.

Orban has said no austerity would be needed after the election to rein in the shortfall, which has exceeded government forecasts in the past years and is seen at around 5% of output.

Centre-right rival Peter Magyar is betting on a quick release of billions of euros in European Union funding, an anti-corruption drive and a wealth tax to shore up state finances.