Orbán cabinet would increase the minimum wage significantly by 2027

Hungary’s minimum wage needs to rise to 50pc of the average gross wage, excluding bonuses, by January 1, 2027, Sándor Czomba, the state secretary for employment policy, told public media on Thursday.

Czomba said that the government had established the benchmark value on the basis of a decision taken by employers and unions. He added that it would put the minimum wage between HUF 350,000 and HUF 400,000 per month by 2027.

To reach that level, the minimum wage needs to rise by 11-12pc per year, he said, adding that GDP and inflation levels as well as increases in productivity also needed to be weighed.

Minimum wage may rise. Photo: Pixabay

Czomba said a government degree mandating the VKF, a forum of employers, unions and the government, to start negotiations on the minimum wage would be published soon.

Although the minimum wage for skilled and unskilled workers affects about 1m people directly, its indirect impact is much broader, he added.

Hungarian economic growth under PM Orbán’s expectations

The European Bank for Reconstruction and Development (EBRD) forecasts Hungary’s GDP will grow by 1.8pc in 2024 and 3.3pc in 2025 in its latest Regional Economic Prospects report released on Thursday. The EBRD lowered the forecast for 2024 by 0.4 percentage point from the previous report published in May. Hungary’s economy grew 1.3pc year-on-year in the first half, driven by a close to 10pc surge in real wages, the EBRD noted.

PM Orbán said Hungary needed 3-6% economic growth. Photo: FB/Orbán

The EBRD said Hungary had become a “key destination” for Chinese foreign direct investment, adding that, in 2023, the country had captured 44pc of all Chinese FDI flows in Europe, largely directed towards the electric vehicle sector. That FDI inflow, estimated at nearly EUR 5bn in 2023 and the first half of 2024, created around 9,000 jobs, it added.

Read also:

• Hungarian government to reshape minimum wage: Major changes by 2027 – read more HERE
• Romania’s minimum wage rises, surpasses Hungary in EU rankings

Featured image: depositphotos.com