At a Sep. 24 press breakfast in Budapest, the investment firm argued that meeting the Maastricht criteria will require sustained fiscal consolidation, lower risk premia and a credible economic policy path rather than a single favorable year of data.
Equilor’s analysis starts from a mixed picture. Péter Aradványi, the firm’s chief analyst, said Hungary did not meet any of the euro-adoption convergence criteria on 2025 data, but that position has improved during this year. Lower inflation and a declining country risk premium mean the price-stability condition may now be met, while long-term interest-rate convergence has also advanced.
The European Union’s formal framework requires candidate countries to meet criteria covering price stability, sustainable public finances, long-term interest rates and exchange-rate stability. The latter also requires at least two years of participation in ERM II (the so-called waiting room to the single currency) without severe tensions, and this is unlikely before 2030.
Recent monetary policy developments support part of Equilor’s argument. The Hungarian National Bank (MNB) kept its base rate at 5.5% on Sep. 22 and announced that its medium-term inflation target will fall from 3% to 2.5% from Jan. 1, 2028, while retaining a plus-or-minus one-percentage-point tolerance band.
Equilor believes the lower target can strengthen nominal convergence, although it could also justify a more cautious pace of monetary easing.
The much harder problem is public finance. Equilor expects Hungary’s general government deficit to reach 7.5% of GDP in 2026 and gross public debt to rise to 77.5% of GDP. The firm forecasts only a gradual improvement thereafter, with debt easing to about 76.5% by 2028 under its base case. Its presentation stressed that the relatively high interest burden on public debt has sharply narrowed the room available to fiscal policy.
Aradványi said the credibility of the 2027 budget will, therefore, be one of the key questions for markets. In Equilor’s view, the announced expenditure cuts are unlikely to be sufficient on their own, meaning the revenue side may also need to contribute. The firm sees a 5-6% deficit next year as a realistic range, while warning that overly aggressive reductions in public investment could improve the short-term numbers at the cost of weaker potential growth.
The challenge is to consolidate without undermining domestic demand. Household consumption and a stable labor market are currently supporting activity, but weak external demand and competitiveness problems in manufacturing continue to limit growth.
Equilor expects new battery, vehicle and electronics capacity to make a more visible contribution from 2027, while incoming EU funds may have a smaller direct growth effect because of their high import content.
The international backdrop is also less benign than it was earlier in the year. The European Central Bank raised its key rates by 25 basis points on Sep. 10, citing renewed inflation pressure from the conflict in the Middle East.
Meanwhile, Equilor expects euro-area growth to remain modest and sees energy prices and geopolitics as risks to disinflation. That combination could complicate Hungary’s effort to reduce rates and risk premia while preserving currency stability.
Despite the fiscal obstacles, Equilor sees clear potential benefits from euro adoption. These include greater exchange-rate stability, lower interest-rate premia and deeper integration with the European Union’s financial system. For a small open economy, the firm argues, the practical room for fully independent monetary policy is already constrained by external conditions and investor sentiment.
There would also be costs, however. Hungary would give up the option of nominal exchange-rate depreciation, independent monetary policy, and some of the flexibility associated with issuing its own currency. Fiscal policy would operate under tighter constraints as well.
Equilor’s conclusion is not that the euro is a substitute for sound policy, but that convergence could provide a transparent framework for restoring macroeconomic stability.
The investment firm expects Hungarian GDP growth of around 2.5% over the next two years, the MNB base rate to decline toward 4%, and the forint to trade in a 360-370 range against the euro.
Equilor also expects the prospect of euro adoption to influence the domestic equity market ahead of any changeover. Reduced currency risk and lower risk premia could make Hungarian assets more attractive to international investors, with banks, interest-rate-sensitive sectors such as listed real estate investment companies, and highly leveraged businesses potentially benefiting.
Past Central and Eastern European euro adoptions provide only a rough guide to market effects. Equilor’s presentation noted that Slovenia and Estonia entered around periods distorted by the global financial crisis, while Latvia, Lithuania and Croatia adopted the common currency in calmer market environments. The firm therefore cautioned against treating post-adoption stock-market performance as evidence of a simple euro effect.
The broader message from the press breakfast was that euro adoption depends less on announcing a date than on establishing a durable path toward lower deficits, falling debt ratios, price stability and credible policy. On Equilor’s assumptions, that process would make 2033 the first realistic window, but only if the improvement in nominal convergence is matched by a sustained repair of Hungary’s public finances.
This article was first published in the Budapest Business Journal print issue of October 2, 2026.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
