The river Danube was set to reach record levels in Budapest on Sunday night and dikes have been strengthened at critical points to protect the capital from flooding, Prime Minister Viktor Orban said.
Tens of thousands of people have been forced to leave their homes and there have been at least a dozen deaths as a result of floods that have hit Germany, Austria, Slovakia, Poland and the Czech Republic over the past week.
The deluge reached Hungary on Friday but so far authorities, soldiers and thousands of volunteers have managed to defend the villages and towns along the river, piling more than three million sandbags beside its dikes.
Carmaker Suzuki, one of Hungary's main exporters, will halt production at its plant in Esztergom, north of Budapest, on Monday because of the floods, spokeswoman Viktoria Ruska told Reuters.
The closure of a bridge means that many of the plant's 3,000 employees would not be able to get to work, Ruska said, adding that production will resume on Tuesday if conditions allow.
The Danube is expected to peak at 8.95 meters (30ft) in Budapest on Sunday night, above the 8.6 meter record in the 2006 floods.
More than 1,300 people from 34 towns and villages have been forced to leave their homes in Hungary and 44 roads have been closed, authorities said.
"The (floods) are approaching the heart of the country now. We can say that the next two days will be decisive," Orban told a news conference in Esztergom earlier in the day.
He said that dikes have been raised and strengthened at the critical points in Budapest.
"In Budapest ... it is not simply the flood which is the problem ... but the complicated public works system through which all kinds of problems can arise," Orban said, referring to increased pressure on the sewage network.
Orban said that water levels are expected to recede only very slowly next week and that he will ask parliament on Monday to approve an extension of the state of extreme danger that was announced last week.
Budapest's hilly Buda area, with its castle and monuments, and flat urban Pest are separated by the Danube, Europe's main waterway, which snakes through the center of the city and thrusts south through the Balkans to the Black Sea.
On Sunday thousands of locals and tourists were strolling along the riverbanks to look at the rising river.