"We won," Socialist Prime Minister Ferenc Gyurcsany told a cheering crowd at his party headquarters after results that gave his coalition 210 seats in the 386 member parliament, up from its previous total of 198.
Echoes of Kennedy
Mr Gyurscsany echoed former US president John F. Kennedy in his victory speech, saying "For a long time we asked the question 'what can I get from the nation?' Today we know that we have to ask at least as strongly and unambiguously 'what we can give to this nation?"
Hungary, for years a post-communist economic success story, is now plagued by a soaring budget deficit.
Political analyst Laszlo Keri said on state television "This is a new situation... because we are not forced to start over everything every four years like we had to over the last decade-and-a-half. This is a new opportunity."
Voter turnout was over 64.3 percent on a warm, sunny spring day, according to national election commission figures.
As they voted Hungarians appeared to want the government just to get on with business as usual.
Zsolt Tasnadi, a 33-year-old economist said "It's not good to have a different government every four years."
Focus on personality
The campaign was the most personality-focused since the restoration of democracy 17 years ago.
It pitted Mr Gyurcsany, a 44-year-old millionaire businessman turned politician against conservative leader, Viktor Orban, 42, a former anti-communist firebrand who has become Hungary's leading conservative.
Mr Gyurcsany, a friend and admirer of British Prime Minister Tony Blair, advocates a compassionate capitalism blending free markets with a welfare system to help the poor and disadvantaged.
Mr Orban urges protectionist policies to shield Hungarian companies from what he has called "wild capitalism."
Both Mr Gyurcsany and Mr Orban made lavish spending promises during the campaign but said hardly a word on much-needed economic reforms for fear of alienating voters.
Analysts have urged the next government to immediately tackle the country's deficit, which reached 6.1 percent of gross domestic product last year and threatens to delay the planned adoption of the euro in 2010 if it is not reduced below three percent by 2008.