Hungary's Election: Tough Fiscal Choices Ahead

0:00It's March 24th. Welcome in. This is Global News Today, where the world meets AI. I'm Cory with the story. S&P Global warns that whoever wins Hungary's parliamentary election on April 12th will need to cut back on social spending to stabilize the country's finances. The budget deficit has already hit nearly 40 percent of the full-year target in just the first two months, thanks to heavy pre-election spending. This comes as the economy faces headwinds from soaring global energy prices. Prime Minister Victor Orbin, who's held power for 16 years, has poured money into programs ahead of the vote, where he's facing his biggest. Challenge yet. Orbin insists no austerity measures will be required after the election, even though the shortfall is projected at around 5 percent of economic output. His center-right rival, Peter Magyar, promises a different path with quick access to billions in European Union funds, stronger anti-corruption, efforts, and a new wealth tax to boost revenues.

1:02Meanwhile, economists are slashing growth forecasts. Goldman Sachs now sees just 1.6 percent expansion this year after three years of near stagnation. S&P maintains a negative outlook on Hungary's BBB minus credit rating, citing risks of even weaker fiscal performance and potential downgrade. Without changes. Fitch ratings echoes this, pointing to weak growth and damage policy credibility as top issues for the next government. With energy costs still pressuring Hungary's high-energy economy and no EU recovery funds expected soon, the pressure is on for tough fiscal choices. Right after the polls close.