With 96.78% of the cast ballots processed, the incumbent senior coalition MSZP wins the first round of the general elections in Hungary, the National Election Committee announced. The Socialist party garners 43.29% ahead of the main opposition party Fidesz with 42.14% of the vote. However, both junior coalition SZDSZ and the junior opposition MDF passed the 5% threshold for parliamentary representation. The former has 6.32% of the vote, while the latter shored up 5.03%. We note that while pre-election polls have indicated that liberal SZDSZ will make it to the parliament, no pollster gauged enough support for MDF, and its entry could be treated as surprise.

Preliminary estimates show that turnout at the first round stood at 67.53%, which compares to a 70.53% turnout at the first round of the 2002 elections. In 68 of the 176 individual constituencies, a candidate won more than 50% of the vote, becoming the direct winner of the first round. Among those, MSZP won 34 seats; Fidesz won 29 seats. Among the remaining 108 constituencies, where a second round will be carried out, the Socialist party leads in 56, while Fidesz in 49. The likely winners in the remaining three tickets are a joint candidate of Fidesz and MDF, a joint candidate of MSZP and SZDSZ, as well as a candidate for a regional party alliance of Somogy County.

Based on the hitherto results, 214 out of the 386 seats in the parliament have been won. Out of those, 105 (49.1% of the obtained mandates) are from the Socialist party, 98 seats (45.8%) for Fidesz, five are joint MSZP-SZDSZ candidates. SZDSZ alone has four seats and MDF two seats. The second round of the general elections will be held on April 23.

Intellinews comment: The elections results show that we have to wait for two more weeks until it becomes clear the line-up of the next government. While the close race between MSZP and Fidesz in the pre-election polls suggested such development, the undisputed winners from the first round are the junior parties SZDSZ and MDF – the latter especially was not expected to pass the threshold in any of the most recent polls. With a four-party parliament configuration, the next government largely becomes dependent on the decision of the junior parties. So far the most likely scenario appears to be re-election of the hitherto government coalition, but we note that with 172 mandates still waiting to be distributed, no final conclusions should be made.

Fidesz already indicated that it would like to start negotiations with MDF, but it is not declared whether the latter would agree on such cooperation. MDF has criticized the populist behavior of Fidesz – and that of MSZP for that matter – and it might be somewhat difficult to substantiate a potential coalition in front of its core electorate. From an economic point of view, the election results mean that political uncertainty will continue to linger for the next two weeks. Both the FX and fixed income market should remain rather volatile with market participants closely watching any cooperation talks between the four parliamentary parties.