By Krisztina Than

BUDAPEST (Reuters) – Ratings agency Moody’s (NYSE:) late on Friday raised Hungary’s sovereign credit rating to ‘Baa2’ from ‘Baa3’ on the economy’s strong rebound from the pandemic, which comes as a boon to Prime Minister Viktor Orban amid a campaign for early 2022 elections.

Orban is the longest serving leader of Hungary since Communist times and faces what may be Hungary’s tightest election in over a decade.

Orban is stepping up his campaign and has given out handouts to the electorate, such as a $2 Billion income tax rebate for families, a waiver of income tax for young workers, extra pension payments, and home renovation grants.

After the Taliban’s takeover in Afghanistan, Orban has intensified his anti-immigration campaign and has become more radical about social policy. He wants to preserve Western liberalism’s traditional Christian values.

Orban claims that the robust recovery permits the spending increase, in spite of calls by the central bank for a faster reduction in Hungary’s deficit.

Moody’s believes the strong recovery in growth and the medium-term outlook for the next years “will support fiscal consolidation” and reduce the government’s debt burden.

Moody’s said that it expects “very limited damage” from the coronavirus epidemic.

According to Finance Minister Mihaly Varga, Hungary could see economic growth of 7%-7.5% in the coming year.

Fiscal and monetary stimuli have boosted household and business loans. This has helped to accelerate the recovery since the first quarter.

Moody’s stated that Hungary’s medium term outlook up to 2025 was supported in part by its high investment rates.

It said that the central bank expected a positive credit rating for Hungary’s economy following the upgrade.

Zavecz Research’s August survey found 37% support for Orban’s Fidesz party, with 39% support for six of the opposition parties.

It is running the first round of primaries to elect Orban’s opponent.

They also criticised Orban’s government for corruption allegations, rising prices and widening the wealth gap.