Hungarian Prime Minister Viktor Orban has announced a new economic initiative that includes an income tax exemption for mothers of two or three children and a cap on housing loan interest rates at 5% starting in April. This move is seen as an effort to strengthen the economy in the lead-up to the 2026 national election.

Orban, who has been in power since 2010, has faced challenges in reviving Hungary's economy amidst rising inflation. As of early 2025, prices have been climbing again, complicating his re-election prospects.

"We are rolling out the most significant tax reduction program in Europe," Orban declared on Saturday. In addition to the previously announced plan to double income tax benefits for families in two stages by January, he stated that his government would exempt mothers of two or three children from income tax. The exemption will start with mothers of three in October, and for mothers of two, it will be phased in gradually from January.

"This will be a considerable expense, but the recovering economy, combined with measures to support businesses and ensure full employment, will enable us to finance this while reducing the budget deficit and public debt," Orban said.

Orban also mentioned that his government is prepared to impose caps on escalating food prices if negotiations with retailers do not succeed in controlling prices. He added that he might also limit food retailing profits as a last resort.

Hungarian inflation, which hit the highest levels in the EU two years ago, rebounded to 5.5% in January, surpassing analysts' expectations. Monthly price growth has accelerated to its fastest pace in two years, driven by increases in food, services, and fuel prices.

Orban, a vocal critic of western military aid to Ukraine during Russia's ongoing invasion, also stated that Ukraine would never become a member of the EU as long as its entry was against Hungary's interests. "Ukraine's membership would devastate Hungarian farmers and, by extension, the entire Hungarian economy," Orban said.