Hungary’s budget supports 2030 euro-entry criteria goal, Fitch says

Hungary’s proposed 2027 budget and longer-term fiscal targets support its ambition to satisfy eurozone entry requirements by 2030, Fitch Ratings said. The agency cautioned, however, that delivering the planned deficit reductions would be difficult.

The draft presented by Prime Minister Péter Magyar targets a general government deficit equivalent to 4.9% of GDP in 2027, compared with the government’s expectation of 7.5% in 2026. Its subsequent targets are 4% in 2028, 3.4% in 2029 and 2.8% in 2030.

Planned spending reductions amount to 1.5% of GDP in 2027, while the expiration of temporary pre-election measures could generate further savings of 1.4% of GDP. The budget anticipates interest-payment savings reaching 0.2% of GDP and roughly 1% of GDP in extra revenue from tax increases and other measures.

Ministries and state-owned companies face operating expenditure cuts of at least 10%. Fitch said the numerous smaller measures and the need to maintain fiscal consolidation would complicate implementation. Some savings are uncertain, and new spending commitments and tax relief totaling about 1.4% of GDP would partly offset the gains.

Fitch projects a slower initial improvement than the government, forecasting a deficit of 5.4% of GDP in 2027 after 7.3% in 2026, before it drops below 3% by 2030. The agency expects public debt to peak at 77.7% of GDP in 2027–2028.

Fiscal compliance alone would not secure euro membership: inflation, long-term interest rates, currency stability and national legislation also matter. Entry requires at least two years in ERM II without severe currency tensions or a devaluation of the central exchange rate against the euro. Joining that mechanism in 2030 could therefore allow euro adoption in 2032 or later.