The victor of Hungary’s 12^th April parliamentary election will need to curb social spending to stabilise public finances, as the economic recovery faces pressures from the global energy price shock, according to S&P Global.

Hungary’s budget deficit hit almost 40% of the annual target in the first two months of 2026, driven by high spending by right-wing Prime Minister Viktor Orban ahead of the vote, where the longtime leader is confronting his toughest challenge in 16 years.

S&P warned that if Hungary does not take steps to rebalance its medium-term fiscal position after the elections, combined with growing external pressures, the country could face a credit rating downgrade.

“We would anticipate that the incoming government ​after the 2026 election (regardless of the government composition) will need to engage in consolidation efforts ​to rein in the trajectory of social spending,” S&P told Reuters news agency.

Orban has insisted that no post-election austerity will be necessary to address the budget shortfall, which has historically exceeded government projections and is currently estimated at around 5% of GDP.

His centre-right rival, Peter Magyar, is counting on a rapid disbursement of billions in European Union funds, along with an anti-corruption push and a wealth tax, to strengthen public finances.

S&P stated that recent global economic challenges have weighed on its 2.5% growth projection for Hungary, following three years of near-stagnation.

On Monday, Goldman Sachs also cut its growth forecast, lowering it from 1.9% to 1.6% in response to the energy price shock.

“Our ⁠current negative outlook to Hungary's 'BBB-' rating reflects the potential risk that its fiscal performance could prove materially weaker than our forecasts,” ​S&P said.

The agency added that the energy price shock could push up both inflation and fiscal costs in Hungary, given the economy’s high energy intensity.

Furthermore, it does not anticipate any support from the EU’s pandemic recovery fund for Hungary, citing time constraints.

Earlier this month, Fitch Ratings highlighted that Hungary’s next government will face major challenges in reversing weak growth, addressing the decline in public finances, and restoring policy credibility, following larger-than-expected fiscal easing ahead of the election.