In a determined call for an economic breakthrough, Hungarian Prime Minister Viktor Orbán outlined an ambitious set of policies designed to steer the nation toward sustained growth and stability. In his recent address, Orbán emphasized the need to create new job opportunities and strengthen the domestic economy through a dual-pronged approach: significant tax cuts for families and targeted reforms in housing finance and food pricing.
At the heart of Orbán’s strategy is a flagship initiative dubbed “100 new factories,” intended to ensure that everyone who wants to work can have a job. This move is seen as pivotal in combating the challenges posed by an inflation-led downturn and a sluggish economic environment. In tandem with job creation, Orbán unveiled what he called “Europe’s biggest tax reduction programme.” The plan will double existing tax breaks for families with children in two phases, ultimately raising the benefits to 20,000 forints for families with one child, 80,000 for those with two children, and 200,000 for families with three or more children measures expected to benefit over a million households.
In a further effort to support citizens and stabilize the economy, Orbán announced that the government will introduce an income tax exemption for mothers with two or three children. The exemption for mothers of three will begin in October 2025, with the one for mothers of two phased in starting next January. These family-friendly tax measures are part of a broader strategy to ensure that fiscal policies contribute to reducing the budget deficit and public debt, even as public spending increases.
The reforms extend beyond taxation. In response to rising housing costs, Orbán’s government is set to cap housing loan interest rates at 5% from April, providing relief to borrowers amid an environment of increasing financial pressure. Additionally, the government has signaled its readiness to reimpose food price caps and even limit profits in the retail sector if talks with retailers fail to keep prices in check an approach aimed at curbing inflation and protecting consumers.
Orbán also took a firm stance on foreign policy, stating that Ukraine’s entry into the European Union would not be permitted if it adversely affects Hungarian farmers and the broader economy.
On the social front, Orbán announced plans to build a new student quarter with dormitory facilities for 18,000 students, reinforcing his commitment to investing in the future workforce. With these initiatives, Orbán’s government aims to not only stimulate immediate economic activity but also lay the groundwork for long-term prosperity, setting the stage for a potentially transformative period ahead of the national elections in 2026.
