Spontaneous euroisation continues in Hungary, expert says EUR 1 will cost HUF 500 soon

The Orbán cabinet regularly voices that they would not like to introduce the euro in Hungary until the country’s economy does not meet multiple conditions. However, the significant drops in the Hungarian national currency’s exchange rate resulted in spontaneous euroisation in multiple areas of life in Hungary, including property and car purchases. It seems the trend will continue.

Forint is underperforming

Multiple surveys show that Hungarians stick to their national currency more than other European nations. For example, in Romania, people regularly calculate in foreign currencies when they buy property or high-value goods like apartment renovation or cars. In Hungary, such ads would have been strange a couple of years ago when the forint was stronger. Now, they are no longer odd.

The forint was introduced after Hungary’s pengő experienced the highest inflation in world history following the devastation caused by the Soviet and German armies fighting a deadly battle in Hungary between September 1944 and April 1945. Hungarians liked forint, and the new national currency proved to be a trustworthy means of wealth creation for decades. That changed after the robust inflation and forint weakening that started in H2 2022.

PM Orbán seems to stick to the forint and prefers to pay in cash. Photo: Youtube/PrtScr

We wrote yesterday that the forint is underperforming compared to other regional currencies. Moreover, it reached historic lows against the American dollar, the Swiss franc, the pound sterling, and even the Polish zloty. Currently, we have to pay more than HUF 411 for one euro. The historical high was almost 424 in November 2022 when the Hungarian National Bank (MNB) intervened and raised the base rate sky-high to protect the forint. Now, they are not expected to do so. Moreover, MNB governor György Matolcsy’s mandate will end next March, so he will probably not carry out fundamental changes in the MNB’s FX policies.

Hungarian forint struggling against a powerful US dollar

Meanwhile, the forint’s weakening is unstoppable. Last June, it was at 362/EUR. Then, a new depreciation trend started, which does not seem to end, primarily due to Trump’s victory in the United States, strengthening the dollar and weakening all emerging currencies, including the forint. Furthermore, Hungarian media regularly reports that the Orbán cabinet is not interested in a powerful national currency because a weak forint helps their export-increasing plans.

Will we soon pay in euros instead of forint? Photo: facebook.com/bpcorrectchange

As a result, it is not surprising that spontaneous euroisation started in Hungary in the past few years. Péter Virovácz, a senior analyst of ING, told Cash Tag that sooner or later, we would exceed the HUF 500/EUR 1 currency exchange level. Therefore, the question is when the Hungarians will spontaneously introduce the euro.

Spontaneous euroisation in multiple sectors of the economy

Mr Virovácz said that in the case of multiple commodities, prices are already provided in euros. One example is car purchase. Of course, you can pay in forints for your car, but its sum will depend on the exchange rate, varying frequently.

A similar trend is perceptible in the construction industry. If you ask for a price calculation concerning some kind of development in your home, you may get the price in euros.

In the Hungarian property market, the changes may mean millions of forints. For example, a 90 m2 luxury apartment cost HUF 376 million before. Now, it is HUF 402 million. The reason is that you have to pay in euros for it, and that price remains unchanged: EUR 978 thousand.

You already have to pay in euros fo rent in some places in Budapest. Photo: depositphotos.com

The question is how long Hungarians will tolerate this trend. In 2026, general elections will be held in Hungary and PM Orbán has a challenger, Péter Magyar, the head of the Tisza Party and the ex-husband of former Justice Minister Judit Varga. If the Orbán cabinet becomes unable to deal with economic difficulties, Mr Magyar has a chance to win in 2026.

Read also:

• The European Commission cools PM Orbán’s optimism about Hungary’s 2025 GDP growth – read more HERE
• Shocking: Stunning rise in Hungary’s housing prices outpaces all of Europe