Economic Policy Objectives of the First Orbán Government (1998–2002)

Abstract

The right-wing coalition government, which came to power in May 1998, led by Viktor Orbán, broke with the former applied neoliberal paradigm and began to pursue economic patriotism, which placed emphasis on assisting the activities of Hungarian SMEs. It also focused on boosting domestic consumption by supporting families to have children through state incentives. Thanks to these measures introduced between 1998 and 2002, both the government deficit and gross government debt started to fall substantially, which reduced the external vulnerability of the Hungarian economy. The objective of this paper is to analyse the economic policy objectives of the first Orbán government between 1998 and 2002. Emphasis will be placed on evaluating the key macroeconomic indicators of Hungary while taking into account both internal and external factors. Due to length constraints, the essay will not highlight domestic politics, but it gives an overview of the main features of economic patriotism from a European perspective.