Hungary plans to provide an annual housing subsidy of 1 million forints (about 5,000 leva) to civil servants, including doctors, nurses, police officers, teachers, military personnel and others, Prime Minister Viktor Orban said, quoted by Reuters, BTA reports.
The proposal, announced by Orban in a post on social networks, is part of a series of socio-economic measures taken by his government on the eve of elections next year. Orban is expected to face unusually strong competition at that time against the backdrop of economic difficulties and public discontent.
„We will give 1 million forints in housing subsidy to civil servants. They will be able to use it to pay off a mortgage or as a down payment on a new home loan,“ Orban said, adding that the final decision would be made next month.
The prime minister, who has been in power since 2010, faces the challenge of rebuilding the country's economy after a sharp rise in inflation caused by Russia's invasion of Ukraine in 2022. According to Reuters, the Hungarian economy has stagnated for a third consecutive year.
The government's financial commitments are growing, including large-scale tax cuts. The total value of family benefits planned for next year amounts to 4.8 trillion forints (about 23.5 billion leva), or nearly 5% of the country's gross domestic product.
A scheme to subsidize mortgage loans for first-time home buyers was also recently introduced, which will cost the budget about $443 million a year in interest subsidies.
In June, the Hungarian government announced its intention to increase public debt, partly to finance these election measures. Meanwhile, economic data showed modest growth of 0.1% year-on-year in the second quarter, slightly above expectations, but not enough to justify the previous forecast of 2.5% growth in 2025. This has now been revised down to 1%.
Orbán hopes that accelerating growth will help him secure a new mandate in the upcoming elections.