Media: Investors brace for shock election that could unseat Hungary's Orban

International investors are closely watching Hungary’s parliamentary election this weekend, with markets increasingly positioning for the once-unthinkable prospect that Prime Minister Viktor Orbán could be voted out after 16 years in power.

Analysts say April 12 vote is likely to be Europe’s most market-sensitive election this year, reflecting Orbán’s long-running clashes with Brussels over immigration, rule-of-law concerns, and his ties to Russia, Reuters reports.

Recent market movements suggest growing expectations of political change. Shares of companies linked to Orbán have fallen sharply, while currency volatility indicators point to potential swings in the Hungarian forint.

“I would say the market is positioning for an Orban defeat,” said Viktor Szabo, an emerging markets debt portfolio manager at Aberdeen, noting his firm has increased exposure to Hungarian government bonds in recent weeks.

Orbán’s position has weakened amid three years of economic stagnation, a cost-of-living crisis triggered by the war in Ukraine, and scrutiny over his relationship with Moscow. Opinion polls indicate a possible victory for Péter Magyar, a former ally from the ruling Fidesz party who now leads the Tisza movement, though analysts caution that outcomes remain uncertain.

Investors are particularly focused on the potential release of up to €18 billion in European Union funding—roughly 8% of Hungary’s GDP—currently frozen over concerns about democratic standards. A Tisza-led government could unlock these funds.

“That money would provide a much-needed boost to investment, which has been a weak spot for years in Hungary,” Szabo said, adding that stronger growth would support public finances.

Hungary faces mounting fiscal pressures, with a budget deficit exceeding 5% and a debt-to-GDP ratio above 70%. Ratings agency S&P Global has warned the country is just one downgrade away from “junk” status.

However, analysts stress that the election could still produce a wide range of outcomes. “In the current situation, anything is possible from a Tisza constitutional supermajority to a Fidesz majority,” said Andrea Szabo, who cautioned that polls may underestimate support for Orbán’s party.

Even if Tisza wins, governing may prove difficult without a parliamentary supermajority. Analysts at JPMorgan estimate only a 5–10% chance of such a result, complicating efforts to reverse entrenched policies.

“The European Commission has previously released funding in response to reforms, so a Tisza government could plausibly secure access to limited tranches,” Capital Economics analysts said. “That said, it’s unlikely that the EU would formally lower the thresholds for unlocking frozen funds.”

The outcome could also influence broader European dynamics, including EU support for Ukraine, which Orbán has partly blocked.

By Vafa Guliyeva