Hungary’s oldest brokerage firm has poured cold water on hopes of early euro adoption, warning that the earliest realistic date for joining the single currency is much later than the Tisza government promised.
Tisza’s 2030 ambition meets scepticism
Following their landslide election victory, Péter Magyar and the Tisza party spoke of introducing the euro possibly even before 2030 if convergence proceeds smoothly. András Kármán, shortly after the win, suggested Hungary could adopt the euro before 2030 provided the Maastricht criteria were met in good order. Even then, several economists cautioned that euro entry was more likely several years later.
Public backs euro, but with caveats
A June Medián poll found three-quarters of Hungarians support adopting the euro, though most insist on thorough preparation first. Only 23 per cent reject the currency outright, a group disproportionately older, less educated and rural. Support is sharply divided along party lines: 92 per cent of Tisza voters favour the euro, compared with just 32 per cent of Fidesz supporters, according to 24.hu.
Tisza campaigned firmly for euro adoption, in contrast to Fidesz. Viktor Orbán, the former prime minister, never ruled out the euro categorically, but his economic programme rested on keeping the forint as Hungary’s currency, allowing his government decisive influence over its exchange rate and related policy goals.
Equilor: Hungarian euro no sooner than 2033
Hungary can introduce the euro no earlier than 2033, with meeting public finance criteria the chief obstacle to eurozone entry, according to analysts at Equilor Investment Plc. Péter Aradványi, lead analyst, told a Thursday press conference in Budapest that while Hungary failed to meet any Maastricht convergence criterion last year, favourable inflation trends and a falling country-risk premium mean the price-stability condition now appears achievable.
He added that Hungary had also made substantial progress on yield convergence, with prospects for sustaining these gains looking favourable. If rapid budgetary consolidation allows entry to ERM‑2, the European exchange-rate mechanism, in 2030, and the mandatory two-year period there is completed without devaluation, euro adoption could occur in 2033 at the earliest, he summarised.
Economic outlook: exchange rate, inflation, debt
But this path demands consistent economic and monetary policy, he stressed. Equilor expects growth of around 2.5 per cent over the next two years, state debt falling to 76.5 per cent of GDP, the base rate easing to 4 per cent and the euro trading between 360 and 370 forints.
Aradványi noted that, because of Hungary’s exceptionally high interest burden on public debt by EU standards, the budget is on a forced trajectory in the short term. Successful fulfilment of the deficit criterion will likely depend heavily on adaptation by domestic and foreign companies, with stronger investment activity and efficient use of incoming EU funds contributing to fiscal consolidation that demands minimal growth sacrifice.
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He pointed out that, alongside the central bank’s lower 2.5 per cent inflation target from 2028, the current pace of price rises can no longer be considered low, which may justify a more cautious monetary easing. This year’s budget deficit is expected to be extremely high at 7.5 per cent of GDP, pushing public debt to 77.5 per cent, and it could still stand at 76.5 per cent in 2028. Equilor says the credibility of the 2027 budget will be the decisive question in coming months, as all three major rating agencies maintain negative outlooks on Hungary’s sovereign debt.
Hungarian euro coin from 2004, the year Hungary joined the EU. The obverse features King Matthias and his wife, Beatrix of Aragon, while the reverse depicts the Phoenix, a Hungarian cargo vessel built for transport on Lake Balaton.
In his view, the announced spending cuts are unlikely to suffice; revenue will also need to rise. On the expenditure side, targeted subsidies may be reviewed, while on the revenue side tax increases could become necessary. Equilor considers a 5–6 per cent budget deficit next year more realistic, since overly restraining investment would improve the numbers in the short term but significantly damage potential growth.Analysts expect the prospect of euro adoption to support the Hungarian equity market, chiefly by reducing currency risk and thereby boosting the international appeal of the domestic capital market.
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