Pakistan, Oct. 5 -- BUDAPEST - Hungarian Prime Minister Viktor Orban on Saturday announced a new cheap loan programme for small and medium-sized businesses at a fixed 3% interest rate, launching Monday, as he gears up for what could be his most challenging election yet.

Facing a stagnant economy and persistent inflation, Orban's government is ramping up pre-election stimulus measures - including subsidised home loans and potential business tax cuts - to regain voter confidence.

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Under the new scheme, businesses can access loans up to 150 million forints ($454,250) at the subsidised rate. The National Bank of Hungary noted that recent fiscal incent...