Experts: Massive austerity measures expected if Fidesz stays in power; if not, real change will take time in Hungary

If Fidesz remains in power after next April’s election, Hungary can expect significant economic austerity measures, warned economist and former central bank governor György Surányi at the Forbes Money Summit conference. According to him, regardless of the government’s actions, adjustments similar to those seen in 2022 will be unavoidable, even if they are given a different name.

Surányi recalled that three years ago, following the elections, the government increased the bank tax and the retail surtax. He believes a similar scenario is likely to unfold this time as well, Telex reports. He argued that the Hungarian economy has fallen into a growth trap: while not in crisis, its current structure prevents 3–4% expansion. The reason, he said, is that the Fidesz government already operates under “hidden austerity”, while export demand is weak, monetary policy remains tight, and the budget has little room for spending.

According to the former central bank governor, a potential Tisza government would have more flexibility to reshape the budget on the expenditure side. By reallocating the hundreds of billions spent on state propaganda, media, and indirect subsidies, or by imposing stricter taxation on casinos, it could achieve greater fiscal balance. Furthermore, such a government would likely gain easier access to EU funds, which the European Commission is currently withholding.

Surányi also spoke about the forint’s exchange rate, saying that an exchange rate of around 400 forints per euro did not previously reflect the country’s economic fundamentals. Today, thanks to the positive trade balance and real interest rates, the forint has strengthened to a more realistic level — largely due to the Mihály Varga–led central bank’s commitment to a stable exchange rate policy.

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Market euphoria possible, but lasting improvement will take time

In another panel at the conference, investors discussed how the markets might react to the election outcome. György Jaksity, founder of Concorde, Viktor Zsiday of HOLD Alapkezelő, and Zoltán Varga of Central Médiacsoport agreed that a change of government would trigger short-term euphoria in the financial markets, although deep economic transformation would only be possible in the long term.

The experts noted that investor enthusiasm would mainly stem from the expectation that a new government — one seeking a more balanced relationship with the EU — could unlock the frozen EU funds. This optimism would be further supported if the central bank continued to pursue a stable exchange rate policy. According to Zsiday, these factors together could even allow for bond yields of around 20%.

However, the experts urged caution, citing Poland as an example: under the Tusk government, stalled judicial reforms have shown that EU patience is not limitless, and that funding only flows quickly when genuine reforms are implemented. Varga added that Hungary’s economic fundamentals — high inflation and an overstretched budget — will not change overnight, so investors would expect real structural reforms.

The investors agreed that maintaining the status quo (if Fidesz wins again) would bring short-term stability but also stagnation for the economy. In the long term, there could be political consequences as well: Jaksity remarked that if Fidesz wins again, “Viktor Orbán would no longer tolerate a democratic challenger beside him.”

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Two paths, two risks

The overall message of the Forbes Money Summit was clear: whether Fidesz remains in power or a new government takes over, difficult decisions lie ahead. György Surányi foresees fiscal austerity, while investors predict political and institutional stagnation. Yet both scenarios share one common point: Hungary’s current economic structure needs change — whether through painful adjustment or gradual reform.