By Gergely Szakacs and Marton Dunai
BUDAPEST, Sept 10 (Reuters) - Hungary's prime minister toldsupporters on Friday the country can take a "giant step forward"if his ruling Fidesz party wins municipal elections next month,enabling it to revive the weak economy.
Viktor Orban, whose centre-right Fidesz has retained athree-to-one lead in opinion polls since ousting the Socialistsfrom power in April, said putting Hungary back onto its feetwould require an unprecedented effort.
"Again, all of us will have to join hands just as we did inApril...wherever we live," Orban said in a sports hall inBudapest. "Hungary can be brought back onto its feet only if welift it everywhere."
Orban, who warned against complacency over Fidesz's massivelead in the polls, kept quiet about his plans for the economy.
Hungary holds municipal elections on Oct. 3, where Fidesz isexpected to extend its grip on power. Seeking to maximise itsvictory, the party is unlikely to present details of its 2011fiscal plans before the vote, analysts said.
The top prize will be Budapest, ruled by liberal mayor GaborDemszky for the past two decades, and Fidesz has a strongerchance than ever to oust the left from its main stronghold as astring of corruption scandals have undermined their support.
The new government has flabbergasted markets several timessince taking office in May, most recently by suspending a reviewof Hungary's 20 billion euro IMF/EU funding deal due to expirenext month and by ruling out a new loan agreement.
Orban's harsh rhetoric against the IMF pleased voters --scarred by a steep recession in 2009 and years of austerityunder the previous Socialist government -- but he failed toconvince the European Union to allow more tax cuts.
Markets took some reprieve this week when Hungary bowed topressure from the EU to cut its budget deficit below 3 percentof GDP in 2011, but Hungarian assets are still weaker than inApril, when Fidesz came to power.
"In the end, the government is likely to do enough to avoiddisaster on the fiscal policy front, and also come to some kindof agreement with the IMF," said Preston Keat at Eurasia Group.
"The ongoing concern is that the main drivers of this policycompliance will be the EU and market pressures, and not any realcommitment to comprehensive reform by the government."
Analysts say Fidesz is likely to focus on popular issues inthe run-up to the vote, such as a set of new rules to helphousehold borrowers reeling under trillions of forints worth ofSwiss franc debt.
"(The economy minister) has helped to calm markets...byreiterating the government's commitment to a deficit of lessthan 3 percent of GDP next year," said Neil Shearing at CapitalEconomics.
"But the proof of the pudding will be in the eating. Weremain cautiously pessimistic."
(Reporting by Marton Dunai and Gergely Szakacs)