Report: Orbán less popular despite economic improvements

Banking

Despite the remarkable economic turnaround Hungary has seen since Prime Minister Viktor Orbán took power in 2010, the popularity of the prime minister and his Fidesz party has been on a steep decline, paving the way for the rise of the far-right Jobbik party, according to an article published by Reuters yesterday.

Reuters noted that the special “sectoral taxes” burdening banks, telecoms, energy and retail have helped the government bring the budget deficit under 3% percent, and the country’s debt is also “coming down slowly”.

Yet people in the streets of Budapest seem to be disappointed by the careless spending of the political elite, Reuters notes. “People walking in central Budapest said if the economy was improving, they were not feeling the effects themselves. Instead, they said, they see a ruling class serving its own interests,” according to the Reuters story. Éva, a 75-year-old who said she used to vote for Fidesz in the 1990s told Reuters that the “economy should not be developed in a way that enriches a narrow segment of people.”

Since the proposed tax levy on internet traffic brought ten of thousands of protesters to the streets of Budapest, the popularity of Fidesz has been falling heavily according to opinion polls, however, a week ago Orbán said "he does not follow country-wide opinion polls".

According to Reuters, market insiders are pessimistic and believe that as economic improvements are not expected to boost Fidesz’ opinion poll ratings, Orbán could abandon fiscal caution. This could lead to the often-discussed cut in Hungary’s value added tax rate before 2018, a cut that Reuters speculates could provide benefit for consumers, but would also would hurt tax revenues.

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