The election race between Hungarian Prime Minister Viktor Orban (Fidesz) and his rival Peter Magyar (Tisza) is a clash of “war and wallets“, writes the Financial Times.
Orban has built his campaign on criticism of foreign interference from Ukraine, which he says seeks to drag Hungary into “war with Russia“. Magyar, meanwhile, has focused on his anti-corruption program and the stagnation of the Hungarian economy.
The newspaper writes that the opposition points to the economic situation and high inflation in recent years as key reason for the eventual defeat of Orban's party in the elections. After the global inflation shock of 2021, exacerbated by the government's pre-election measures, core inflation in Hungary in 2023 reached 25% (one of the highest levels in the EU). The average wage in Hungary remains one of the lowest in the EU - 1,038 euros compared to 2,351 euros. All this is complicated by low GDP growth.
“Orbanomics“, which includes nationalist industrial policies, cheap energy supplies from Russia and investment from China, has exhausted its potential, say Tisza and some economists, the publication claims. Hungary has fallen into a middle-income trap, dependent on low-wage production and foreign capital, said expert Ilona Győrzínska.
“The oligarchization of the economy, the clientelistic system of public procurement and the politicization of institutions have further weakened competition, innovation and the country's ability to move up global value chains,“ she added.