Orbán gears up for historic borrowing spree to fund pre-election spending in 2026
According to the State Debt Management Centre Plc (ÁKK), the Hungarian state is preparing for a colossal borrowing programme in 2026. Current plans outline roughly €9.6 billion in what would be a historic loan haul — equivalent to around HUF 3,691 billion at current exchange rates. A substantial portion of this would be raised through foreign-currency bond issues, meaning that a weak forint could send debt-servicing costs soaring.
PM Orbán is preparing for historic borrowing
Economics 101 tells us that a state cannot go bankrupt if it borrows in its own currency — it can always print more money. Of course, this leads to massive inflation and plunges large segments of society into poverty, as happened in Hungary after both 1918 and 1945. Nevertheless, the budget itself does not become insolvent; instead, the real value of its debts is drastically reduced at the expense of citizens and businesses.
The ÁKK’s financing plan for next year includes €9.6 billion in borrowing through bond issues and loans. According to mfor.hu, €2 billion of this would come from the European Union’s SAFE programme, intended to finance defence-industry upgrades. However, the scope of this programme is open to broad interpretation — funds could even be used to build railway bridges.
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Historic foreign-currency borrowing: a scheme that once bankrupted thousands of Hungarian households
ÁKK plans to cover the remaining €6.5 billion mainly through foreign-currency government bond sales, although it has not specified the exact currencies or timing under which taxpayers will be saddled with this debt. That will depend on market conditions. Of the proceeds, €3.1 billion will immediately be used to repay maturing foreign bonds, leaving more than €6.5 billion (around HUF 2,500 billion) to “serve the budget’s general financing needs”. In other words, the government is likely to spend a large part — or all — of this sum on pre-election giveaways, according to mfor.hu.
G7 estimated expected pre-election government spending and found on 14 November 2021 that, based on official promises, the state budget would face an additional burden of at least HUF 1,629–1,725 billion.
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Even with this borrowing, ÁKK maintains that the share of foreign-currency debt in total government debt will remain at around 30%, which it considers manageable. This is true only as long as the forint remains strong. If it weakens again to the grim 400–410 levels seen previously, financing foreign-currency debt would become brutally expensive — just as it did in the late 2000s, when foreign-currency loans pushed households into collapse one after another.
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