Experts worried that PM Orbán’s brutal wage rise will bring inflation and a HUF 500/EUR exchange rate
PM Orbán talked about a shockingly quick wage rise in Hungary between 2025 and 2028 in his latest interview in the Kossuth Rádió. He said the average Hungarian wage should reach HUF 1 million, the minimum wage should be EUR 1,000, and the minimum wage would equal 50% of the average income. The maths only makes sense if the forint-euro currency exchange rate worsens significantly.
450-500 EUR/HUF exchange rate may come by 2027-2028
Officials of the Hungarian government and PM Viktor Orbán talked about the significance of salary rise in Hungary. That is not surprising: in spring 2026, there will be general elections in Hungary, and Orbán has a challenger, Péter Magyar, whose support is steeply increasing.
Orbán and his government determined three numbers in that regard. They said the average wage should be HUF 1 million (EUR 2,500), the minimum wage should be EUR 1,000, and the minimum wage should be 50% of the average salary. The calculation’s result is HUF 450/EUR, which is astonishing considering the public outrage that followed the end-2022 forint historic forint fall when the Hungarian currency reached 426/EUR. Thanks to the Hungarian National Bank’s intervention and the sky-high base interest rate they introduced, the forint stabilised at the 390/EUR level.
More paper money with less value? Source: Pixabay
If we bring the regular average wage in Hungary into the calculation, which, experience shows, is 10% below the average salary (HUF 900,000), the currency exchange rate increases to 500/EUR.
Before, the Hungarian government talked about a HUF 375,000 (EUR 933) gross minimum wage as their target until 2027. However, Orbán’s wage rise means the minimum wage should increase by 50% in the next three years. That would be a 16% annual rise concerning the average wage and 14.5% in the case of the minimum wage, provided the euro exchange rate remains at HUF 400/EUR.
Experts worried that the wage rise would bring inflation and forint fall
Only a powerful Hungarian economy could generate such an increase in the well-being of the Hungarians. However, the Hungarian economy is struggling. We wrote about the falling industrial output and a possible recession HERE.
The other option is skyrocketing inflation, which would burn the “extra money” of the Hungarian households, just like it did between 2022 and 2024.
Since Orbán wants outstanding economic growth (3-6%) in the next few years, the Hungarian National Bank will not be able to stop the fall of the forint with a high base interest rate.
As a result, both Portfolio and G7 suggest the government’s aims are not coherent. If they want robust economic and wage growth, they will need to sacrifice the forint and create inflation. Another consequence can be that many small and medium companies will cease operation because of the wage-price spiral.
What’s more, Bank of America analysts wrote that the forint is significantly overvalued, and a HUF 430/EUR currency exchange rate was realistic. They added that the Hungarian economy’s productivity stagnated, and the difference between the interest rates of Hungary and the EU decreased.
National Federation of Workers’ Councils agrees with govt targets
The National Federation of Workers’ Councils agrees that the minimum wage needs to be increased to the equivalent of 1,000 euros and the average wage from the current amount, some 600,000 forints (EUR 1,500) to 1 million forints, and that this would be possible within 2-3 years, the organisation said on Friday in response to an announcement by the prime minister earlier in the day.
PM Orbán told public radio on Friday morning that a cabinet meeting earlier this week discussed ways to achieve the 1,000 euro minimum wage and the increase of the average wage to 1 million forints. Orban said the plans could be fulfilled if they managed to agree with employers and employees.
The National Federation of Workers’ Councils said it would offer all the professional help needed for the plan’s success. It is important that social partners including workers’ interest representation bodies and trade union alliances are involved in the process to achieve a more active coordination of interests, and it could result in a reform of regulations on minimum wages, it added.
Read also:
- Hungarian forint doing something unprecedented: further slip expected – read more HERE
- Morgan Stanley predicts euro could reach 410 forints amid worsening economic outlook
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6 Comments
The Real Person!
The Real Person!
Never mind 2027-2028. 450 forints per euro will probably come by the end of 2025 or early 2026. Outside of raising the minimum wage how does Orban magically make wages rise? Don’t employers determine what they are willing to pay workers and of course it is dependent on what their profit margin is to allow for a pay raise. I have never seen a government anywhere in the Western world make a pronouncement on what wages will be. It’s all determined by economics and the market place EXCEPT IN DICTATORSHIPS. Orban’s statement is a bad joke for Hungarians who will believe anything these bandits will tell them.
The Real Person!
The Real Person!
STRANGULATED – Debt riddled Orban led Fidesz Government of Hungary – to China/Russia and European Union Debt – that WILL increase, just not through interest rate compounded but more judgements handed down on Hungary – through FAILURE to COMPLY and in there practice of Fraudulent activity.
– What country in the Western World would Lend money to Hungary ???
– Debt to China and Russia the “give aways” selling off of Hungary by the Orban – Fidesz Government of Hungary, arrangements entered into with China and Russia and interest rate levels are DESTROYING on the Hungarian Economy and any further thought by Orban and Varga – to BORROW on or further DEEPER with China and Russia would be PERILOUS for Hungary, the existence and FUTURE of Hungary.
– Hungarians – get YOUR Heads around that as a country we are HEAVILY taxed.
– Orban – the Fidesz Government FACTUALLY “double dip” us on taxes they take from us being personal and company taxes through the ADDITION of the VAT componentry in our Hungary’s taxation structure.
– Ageing Population.
– Deaths per annum of Hungarians out-number new born, which has been the trend in the 15 years of the Orban – Fidesz Government.
– Highest Vat in the European Union – 27%
– Highest Interest Rates in the European Union – that the Central Bank of Hungary must ASAP increase the Interest rate.
– Forint – its on-going de-valuation a cataclysmic DISASTER – that will see the FORINT weaken DRASTICALLY.
– 2nd lowest in OVER-ALL performance – quality of LIFE of the 27 European Union country’s.
– 3.1 million and growing Hungarians living in POVERTY.
– Hungary – under the Orban / Varga policies Economically and Financially – never pre the Covid outbreak designed to build the CAPITAL or Worth base of Hungary.
– Government capital gives POWER(s) to Government to make INVESTMENTS without BORROWING in Hungary’s case which Orban & Varga have WRONGFULLY undertaken – from China and Russia.
– Property / Real Estate Markets – Rental Market – that are in CARNAGE – through lack of NO investment, from the West nor the East. – Hungarians – buyer interest in markets that continue to be TOP heavy – greater numbers of property continuing to build on against actual BUYER interest, just DEEPENS the CHAOS in the Real Estate – Property and Rental Markets in Hungary.
The “Blood Bath” – sooner than later COMES.
– Hungary – its POLITICAL VULNERABILITY – its Economic and Financial “trending” collapse is factually growing in acceptance being viewed as HIGH high high risk – in any form of INVESTMENT.
– Hungary, under the Orban led Fidesz Government of Hungary, that SUPPORTS the Distillation of Democracy, the return of Hungary to a Dictatorship regime and be Governed under Laws of Communism – FACT.
– Hungary – under the Orban – Fidesz Government the SMASHING or ending of relationships in the European Union, NATO and Schengen with Great Britain and Northern Ireland and the United States of America.
– RELATIONSHIP(s) once enjoyed by Hungary, before the “Judas” acts of Orban and his Fidesz Government – GLOBALLY with country’s Governed under DEMOCRACY – obliviated.
– Hungary – Education is in Disarray remaining totally Under-Funded, that Educators are given NO priority in the role they play for the Future of Hungary.
– Educations – it turns MIRRORS into Windows.
– Education – opens WINDOWS of OPPORTUNITIES.
– KNOWLEDGE is that the Orban – Fidesz Government of Hungary as they DO and practice, the control of the media, the control of the judiciary, rule by Decree – want to CONTROL Education, which would be a DISASTER.
The subject of this article and “others” being INFESTED into the media by the Orban – Fidesz Government that are just when broken down evaluated placed into the COLLAPSED state at this present time and into the FUTURE of Hungary – that are lacking Fact & Truth – just blatant abusive and disrespectable insulting PROPAGANDA directed at the CITIZENS of Hungary – is Heinous.
Orban – Varga the “infamous” Fidesz Government of Hungary, that after 15 years in Government have delivered us as a country to a trending deeper un-known nadir BLACKENING black hole, that’s its end – the pain we bear now as a country will be substantially WORSENING.
Hungarians – what is being MOUTHED out by Orban and Varga – on the subject of PAY Rises just an IMPOSSIBILITY for us, still in the workforce and those in the near 1 or 2 years that become tax payers to the Orban – Fidesz Government – to find the level of Wages and Salaries – talked by Orban & Varga – the Fidesz Government – to workers in Hungary.
The sums, the maths the Economic and Financial rational from the BUILDING escalating present Horrendous DEBT established by Orban & Varga – the Fidesz Government – just won’t and can’t be ACHEIVED.
WATCH the propaganda increasing out of Orban and Varga, the Fidesz Government through the increasing rightful PRESSURIZATION on them, from in-side Hungary, throughout country’s of Democracy in Europe and the wider Global World from country’s under DEMOCRACY.
HARSHER – Uglier darker times ahead – we will live with in Hungary – and that’s – FACT +.
The Real Person!
The Real Person!
The only way businesses can raise wages in an economy is if labour productivity rises signficantly which makes for a greater profit margin. Labour productivity peaked in Hungary in Q2 2022 and has been flat to slight lower since then (from Trading Economics). The whole article is complete nonsense when Orban discusses planning this with employers and employees. Every government should be doing this kind of magical “planning”. It’s so simple when described by Orban. It’s fairy tales from Fidesz. Industry needs to invest large amounts of capital into equipment that would raise productivity. Some jobs would be lost due to automation and hopefully those surplus workers would find jobs elsewhere.
The Real Person!
The Real Person!
Hungarians in MILLION’s – just being LIED to by this HEINOUS Government.
Larry and Knowledge is the Light of the MIND – for your FUTURE our FUTURE as a country, take ACTION’s immediately to put an end to what the Hungarian Government under Orban have already done destroying Hungary and RID ourselves of them.
Repulsive just LIES and more Lies throwing out into the faces of Hungarians from “all stations in life” just FALSE and un-achievable data.
Honesty as individual Hungarians – as a race nation of people being HONEST with ourselves – remembering the ABUSE handed out to us – the DISRESPECT to us as a nation of people over 15 years and what have we been DELIVERD being sent BANKRUPT as a country.
Vile.
PRODUCTIVITY to generate revenue income to this Government, what it has undertaken to DESTROY the Economy, the Financial future of Hungary – what Orban is saying is un-achievable NOT possible EVER in Hungary.
Orban has DOOMED us – driven us to a position that NEVER, never, never – will we be in a position as a country to STAND alone – to SUSTAIN – to GROW our Economy – support ourselves INVEST into making Hungary part of the 21st century – from what we internally produce manufacture in Hungary.
Orban – 15 years that have not GROWN the Capital – the worth, the bank account of the Government.
What are with LEFT with, a Government that is theoretically factually BANKRUPT – Insolvent – with gargantuan Debts at inflated interest rates to China and Russia and HUMONGOUS on-going DEBTS through Fines handed down through Legal Process to Hungary rightfully by the European Union.
Wow – what a NIGHTMARE and still in MILLIONS Hungarians we just sit on our BUMS and go along with it no accepting, showing CONCERN – that the ENTIRE picture will sooner than later – massively WORSEN in Hungary,
Repulsive and an OBOMINATION and Hungarians you we want to endeavour to SALVAGE something from this Orban – Varga – Economic & Financial MESS – we better up our intensity, our actions, our voices, our orderly marches and demonstration(s) – because we continue to be SCREWED over by the Orban – Fidesz Government that have “Dogged” us – FAILED and Lied, betrayed US.
The avarage Hungarian moron doesn’t understand that the purchasing power of the Forint will be much lower. They will earn much more forints but it will be worth much less, this is the definition of inflation. Lets say you make 500 a month and with that you cand buy 2 apples. After the Viktator increase you will make a 1000 a month but you can buy with it only 1 apple, are you better of now?!
The Real Person!
The Real Person!
Non stop moaning about low wages-now it’s going to be brutal
There is a problem with workers attitudes here-like they are working on in the old system..
I would hate to be a business owner here with attitude that employees are doing you favor for showering up or being helpful to costumers..
I hate seeing all the chains move in and dominate so much of market.