Where is the Hungarian economy heading?

Following the April elections, the new government is making firm efforts to assess the actual economic situation and, in light of the real figures, to evaluate the feasibility of its campaign promises.

According to available data, the Hungarian economy is not in good shape. Inflation is high; even according to the Central Statistical Office, consumer prices rose by a total of 50–53% between 2020 and 2025.

In 2020, the gross minimum wage was 169,000 forints (approx. EUR 510), which rose to 290,800 forints (approx. EUR 720) by 2025 (and to approx. EUR 820 in July 2026). At the same time, minimum-wage earners make up about 35% of the total workforce.

Economic growth between 2020 and 2025 was barely noticeable, with the exception of 2021 (+7%) and 2022 (4%). This translates to a mere 1.25% expansion for the entire five-year period.

So the actual figures do not look good. Nevertheless, market players remain optimistic about the economic and political decisions promised by the new leadership during the election campaign.

This is reflected in the fact that the forint has strengthened to a five-year high (approx. 354 HUF/EUR), which supports efforts to manage inflation. A seemingly pragmatic, professional relationship has developed between the new political leadership and the central bank management, which also boosts market confidence.

Currently, policymakers are driven by the effort to draw down and utilize the 16.4 billion euros in EU funding still available to Hungary until August 2026.

As things stand, the new government has a good chance of achieving this. Successfully using these funds would provide serious support for the Hungarian budget and could significantly ease financing shortfalls in public services, transport, healthcare, and education.

While the market does not explicitly back the implementation of the new economic concepts, the fact that credit rating agencies are holding back can be seen as a positive sign. Given the actual figures of the Hungarian economy, there had been previous speculation about potential downgrades.

However, the major rating agencies have kept the country’s rating unchanged, so Hungary remains in the investment-grade category.

Although next year’s budget deficit is estimated to be around 5.7%, the outlook could slowly put Hungary back on a growth path, driven by the reallocation of government spending, the possibility of adopting the euro, and a potential drop in interest rates for financing the budget.

Yet, as an open economy, Hungary remains exposed to international developments. Expected increases in raw material and energy prices, along with the weakness of the European automotive industry, could hit the Hungarian economy hard.

Increasing the share of higher value-added economic activities will not show benefits in the short term, and the current economic structure still has a low income-generating capacity.

Still, the government’s high level of public support makes it possible to introduce changes that point toward stable development and growth in the medium term.