Hungarian Prime Minister Launches New Loan Option For Small Businesses

By Sierra Campbell, Managing Editor for small.news

(small.news) — The prime minister of Hungary has announced a new loan program for small- and medium-sized businesses that will offer a fixed interest rate of 3%, according to Reuters.

Viktor Orban has been prime minister since 2010 and could be facing his toughest election year, according to analysts. Inflation has prevented interest rate cuts by the central bank in Hungary, and the economy is stagnant.

These new loans come after a subsidized home loan program was introduced for first-time homebuyers in September. The interest rate for these loans are at below half the market rate, with central bank’s current rate being 6.5%.

Potential Tax Cuts On The Horizon?

During a briefing, Orban said, “The new loan will be available… with a fixed 3% interest rate, free use, and a cap of 150 million forints.” He also hinted at the possibility of future employment-related tax cuts for businesses, but didn’t offer any details.

Officials at the National Bank of Hungary said that government measures like supporting civil servants with housing, could help boost a household’s net income by nearly 2%. Officials also said that the new housing loans could give a boost to consumption growth, which would create a lending surge.

Analysts Warn Economy Growth Could Be Temporary

Despite this, small business owners should be cautious. Analysts from OTP Bank claimed that the economy will only grow around 0.6% in 2025, according to Reuters. It could grow to around 3% in 2026 mostly due to consumption because of the fiscal stimulus before the election.

However, this boost could be temporary. The budget deficit could go over 5% of the economic output next year, and would have to be fixed.