The Hungarian government yesterday announced a package of measures worth 100 billion forints ($300 million) to support the hospitality sector and said it would cover additional heating costs for households in January.
The measures were announced by Prime Minister Viktor Orban's government as the experienced leader faces a tough task of reviving the economy ahead of April elections, with his right-wing Fidesz party trailing opposition challenger Tiso in the latest polls.
A Eurobarometer survey in the fall showed that rising living costs were Hungarians' top domestic concern - even though inflation had receded from above 25 percent in early 2023 to the central bank's target tolerance zone of 2 to 4 percent in November.
Orban's government will provide liquidity support to restaurants, halve the tourist tax and abolish the entertainment spending tax for companies up to 1 percent of their annual turnover, financial news website portfolio.hu reported, citing Economy Minister Marton Nagy.
Nearly 10.000 restaurants will also be allowed to treat up to a fifth of their revenue as a service charge, which would reduce their tax bill, Reuters reported.
Later in the day, Orban said the government would pay for the extra costs households face on heating bills due to freezing temperatures in January.
It was not immediately clear how the measure would affect the existing state subsidy scheme, which is in place for household gas and electricity consumption.
Gas and electricity price caps were a key pillar of Orban's policy, but costs rose sharply in 2022, forcing the government to abandon them for high-spending households.
Orban previously announced large tax breaks for families, wage increases, food vouchers for pensioners, a one-time pension supplement to be paid in February, as well as a program of subsidized housing loans, to shore up support.
Fitch Ratings lowered Hungary's outlook to negative at the end of last year, due to Orban's pre-election spending initiatives.
Bonus video:
