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Hungarian economic reform and 2027 budget projections

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2026-10-21 13:07 UTC → 2026-10-21 18:47 UTC · added ~~removed~~

The Hungarian government has formally presented its 2027 budget proposal, led by Prime Minister Péter Magyar and Finance Minister András Kármán. The plan focuses on supporting lower-income groups through measures such as doubling the family allowance, increasing the minimum pension, and implementing significant wage hikes for public sector workers in healthcare, social services, and law enforcement. Recent details specify a 677 billion forint allocation for public sector wage increases, affecting approximately 603,000 workers. Specific increases include 17% for healthcare workers, 17.8% for social sector employees, and 21.5% for educational support staff. Additionally, the administration intends to reduce the personal income tax rate for minimum wage earners to 9% and potentially raise the minimum pension to 120,000 forints. To fund these social initiatives and achieve the target of reducing the budget deficit from an estimated 7.5% of GDP in 2026 to 4.9% in 2027, the government has proposed several tax increases. These include a wealth tax on the richest citizens, higher taxes on energy and mining profits, advertising, and company cars, as well as an increased corporate tax of 15% for companies with annual revenues exceeding 180 billion forints. The administration has set a long-term goal of reducing the deficit to 2.8% by 2030. Economic forecasts for 2027 project a 2.4% growth rate and 3% inflation. Finance Minister Kármán noted that the budget aims to stabilize the economy to facilitate potential future entry into the eurozone, possibly by 2032. Newer details of the proposal include an allocation of 510 billion forints specifically for healthcare development, intended for new ambulances and diagnostic equipment. Furthermore, an energy modernization program has been introduced, aiming to assist 120,000 families in reducing energy costs by 2030 through subsidies for insulation and window replacements.

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