Hungarian Prime Minister Viktor Orban's hopes that a strong economy will propel his Fidesz party to another election victory in 2026 are being challenged by a rebound in inflation, sagging household morale and even a plunge in the birth rate he so wants to boost.

BUDAPEST (Reuters) - Hungary's government will offer free grants to hundreds of thousands of pensioners in rural areas to renovate their homes, Prime Minister Viktor Orban said on Wednesday as the veteran leader gears up for elections due in about a year.

Viktor Orban also highlighted as a major achievement that Hungary was able to pay interest on government bonds. In PM Orban's view, strengthening the middle class is a realistic goal. He noted that compared to the growth in the last quarter, even higher growth can be expected this year.

Hungary will give grants to pensioners in rural villages to help them renovate their homes, as Prime Minister Viktor Orban looks to boost flagging support before key elections.