Unpopular Policies Ahead

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Having secured an unprecedented second-term victory in the Hungarian general elections, the question now concerning international observers is the government's appetite for pursuing reforms, which will be a necessary step to restore fragile market confidence in the country's dire public finances. Encouragingly, measures to raise the lower VAT and corporate tax rate by 5 percentage points, together with cuts to drug and housing loan subsidies and ministry spending have already been mooted, with savings of HUF300-350bn proposed this year. However, no concrete measures will be announced until late May, and many outside observers still feel politicians have yet to grasp