Minister: Hungary’s pension system reliable

hands pension elderly pray

Hungary’s pension system is “reliable”, with the government covering pension payouts, Finance Minister Mihály Varga told parliament’s welfare committee on Tuesday.

Varga said pension hikes were based on economic growth, adding that growth had to be maintained in order to preserve the purchasing power of pensions. The minister said the government had made a commitment to have pension hikes keep up with inflation.

Since 2010, the average pension has increased to HUF 217,000 (EUR 571) from HUF 97,000 (EUR 256) and its purchasing power is up around 20%, Varga said. Next year’s budget allocates HUF 6,540 billion (EUR 17.3 million) for pension payments, he said, noting that Hungary’s 2.5 million pensioners will see a 6% pension rise in January.

Meanwhile, he said an international analysis of the Hungarian pension insurance system could be released soon. The report will also be evaluated by the government, with its recommendations to be put to a public debate in the first half of 2024, he added.

The functioning of the pension system must also be secured for the long term, Varga said, adding that there was no need for any urgent intervention. He rejected austerity measures, saying that the government had been against such policies even during times of global economic challenges and instead favoured job creation and price caps.

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