Hungary's PM Orban plans grants for rural pensioners as pre-election spending rises

Hungary's government will offer free grants to hundreds of thousands of pensioners in rural areas to renovate their homes, Prime Minister Viktor Orban said on Wednesday as the veteran leader gears up for elections due in about a year.

The plan would benefit a voter group that has traditionally supported nationalist Orban's Fidesz party, which faces unusually strong political and economic challenges this year, with the economy barely growing.

His government is targeting 3.4% growth this year -- which most economists say is far too optimistic. Orban hopes growth would be boosted by housing subsidies, wage and pension increases, and a capital injection for small businesses.

However, some investors are concerned that the weak economy could trigger the kind of fiscal largesse that helped Orban get re-elected in 2022.

Orban said in a Facebook post that his government was planning to provide a grant of 3 million forints ($7,683) per person in rural areas to help them renovate their homes.

He said in a separate post that the scheme would cost 90 billion forints over two years, and pensioners living in villages with fewer than 5,000 inhabitants would be eligible. His Fidesz party has the strongest support in the countryside, in smaller towns and villages.

Orban is facing the most serious political challenge since he rose to power in 2010 from Peter Magyar's centre-right Tisza Party that swept into Hungarian politics last year.

According to polls published in January, Tisza has a small lead over Fidesz. The latest poll, conducted by the Publicus Institute think tank between Jan. 20-29, showed that Tisza had 42% support among decided voters while Fidesz had 37%.