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The strategy relies on spending restraint, renewed EU funding and productivity reforms.
The Medium-Term Economic Policy and Fiscal Program 2027-2030, published in October, forecasts GDP growth of 2.4% in 2027 and 2.6% in 2028, following an expected 1.7% expansion this year.
It sets a growth path of 3% for 2029 and 3.1% for 2030, explicitly describing those later figures as policy aspirations dependent on structural reforms and stronger investment, rather than conventional forecasts.
The government presents the program as a shift away from growth driven by additional labor and capital toward a model based on productivity, competition and higher-value activity.
The program puts the 2026 general government deficit at 7.5% of GDP, substantially above the original budget’s 3.7% target. The ministry argues that, without corrective action and agreements on EU funding, the shortfall would have reached 8.3%.
It attributes the deterioration to pre-election measures, weak expenditure control, unfavorable contracts, tax refunds ordered by courts and economic growth below the original 4.1% assumption.
The planned deficit falls to 4.9% in 2027, 4% in 2028, 3.4% in 2029 and 2.8% in 2030. Most of the adjustment would therefore occur next year.
The government plans further savings of HUF 1,465 bln in 2027, in addition to maintaining measures expected to save approximately HUF 700 bln this year.
Its stated priorities include reducing overpriced procurement and operating expenditure, narrowing poorly targeted corporate subsidies and strengthening competition for public contracts. It argues that lower procurement prices could preserve activity while reducing the cost to taxpayers.
The 2027 balance would also benefit from the expiry of one-off expenditure, including the armed forces and law enforcement bonus, certain housing support programs and exceptional transactions associated with EU recovery funding.
The strategy places EUR 16.4 bln in EU resources at the center of the recovery. According to the ministry, annual inflows could approach 3% of GDP, supporting infrastructure, business development and investment in human capital.
The program says previously suspended cohesion and Recovery and Resilience Facility funding became available following agreements with EU institutions. Access and spending remain linked to reforms and milestones, including judicial changes, procurement transparency and the restructuring of public interest asset management foundations.
Priorities include railway rolling stock, energy networks, smart metering, digitalization and SME competitiveness.
The ministry expects investment to become a growth driver from 2027, following several years of contraction. Gross fixed capital formation was still 3.8% below its year-earlier level in the first half of 2026.
By 2028, investment is projected to contribute 1.4 percentage points to GDP growth. The investment-to-GDP ratio could recover to approximately 23%-23.5% by the end of the decade.
Household consumption, expected to grow 4.5% this year, would remain supportive but gradually contribute less as real wage growth moderates. Automotive and electronics capacity is expected to strengthen exports, although investment recovery would also increase imports.
The euro serves as the program’s medium-term policy anchor. The commitment is to satisfy accession conditions by 2030, rather than a promise to introduce the currency that year.
The ministry argues that Hungary’s integration with European supply chains strengthens the case: approximately three-quarters of exports went to EU markets in 2025, including 60% to the euro area.
It expects membership to reduce exchange-rate uncertainty, financing costs and vulnerability to external shocks, while making trade and investment planning more predictable.
The document identifies fiscal consolidation as the largest remaining task. It also calls for cooperation between the government and the National Bank of Hungary on inflation expectations, financial integration and preparations for banking union membership.
Lower financing costs are expected to emerge gradually. The baseline projects government interest expenditure declining from 3.9% of GDP in 2026 to 3.3% in 2030.
Despite September inflation of 1.6%, the program anticipates renewed price pressure from late 2026.
It cites drought, international food prices, the fading effect of forint appreciation and the removal of retail margin caps. Higher energy costs could feed into manufactured goods, while excise increases would raise alcohol and tobacco prices.
Annual average inflation is forecast at 1.7% in 2026 and 3% in 2027, before settling at 2.5% from 2028. The ministry expects inflation to stabilize around the central bank’s lower target from the second half of 2028.
The labor outlook is constrained by demographics. The working-age population is shrinking by approximately 50,000 annually, limiting scope for expansion without higher participation and better employability.
Employment is expected to grow only moderately, by around 0.2% annually, while unemployment is projected to fall below 4% by 2030. Private-sector nominal wage growth is forecast to slow to 6% next year.
Government debt is projected to rise from 74.4% of GDP in 2025 to 77.5% in 2026, then decline to 77.2% in 2027 and 74.9% by 2030.
The relatively modest reduction illustrates the continuing constraint imposed by borrowing costs and deficits. The primary balance, excluding interest payments, is not expected to turn positive until 2029.
Alongside savings, the program envisages a wealth tax, corporate taxation aligned with the global minimum tax and revised allowances. It also allocates HUF 677 bln for public-sector wage increases in 2027 and promises more targeted support for lower-income households and pensioners.
A broader public finance reform package is expected to reach parliament in 2027, covering fiscal rules, medium-term planning, expenditure reviews and the Fiscal Council’s capacity.
Delivery depends on maintaining spending discipline while executing reforms and absorbing EU funds effectively. The program also assumes improving European demand and easing energy costs, leaving Hungary’s planned recovery exposed to external developments.
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