National Economy Minister Márton Nagy spoke at an event in Miskolc on Monday, part of the Joint Venture Association’s Country Ride series.
Hungary is in “a good position”
Nagy said the government’s new economic policy action plan, a “precondition” for boosting economic growth over 3pc next year, was based on economic neutrality.
On the domestic front, he pointed to a gradual increase in retail sales and augured a further improvement in consumption as real wages rose 9-10pc. He also noted a significant increase in domestic guest nights, climbing used car sales and an 8-9pc rise in new car registrations.
Weighing external factors, Nagy said the “real breakthrough” would come when Germany’s economy, which impacts Hungary’s exports as well as its FDI, “pulls itself together”.
In terms of energy, Hungary is in “a good position”, Nagy said, with dynamically growing solar capacity and an expansion of the Paks nuclear power plant in the pipeline.
He said the Demján Sándor Programme for scaling up SMEs would make HUF 1,410bn available to businesses.
Hungarian wages are better than Romanian wages
Márton Nagy gave an interview to Index. In response to their questions, the minister said that the Romanian average earnings statistics also include elements of earnings that do not appear in the Hungarian earnings statistics, such as travel allowances and cafeteria.
Therefore, to compare apples with apples, you should use the Hungarian statistics as a basis for the labour income and not the average earnings. In the first three quarters of 2024, the average gross labour income in Hungary was HUF 678 thousand, which is EUR 1723 converted, while in Romania, it was RON 8379, which is EUR 1648 converted, i.e., almost EUR 40 lower.
According to Márton Nagy, the Romanian economy is unsustainable in the long run, as public wages are pulling the national average, only increasing the twin deficits. As an example, he cited two sectors where Romanian net average wages significantly exceed those of Hungary: public administration and information communications.
According to Márton Nagy, gross income in Romania is taxed more than the average wage in Hungary, so the average net labour income in Hungary is almost EUR 120 higher than in Romania.
He underlined that in 2024, in Hungary, the tax base can be reduced by HUF 66,670 (EUR 166) for one child, HUF 133,300 (EUR 333) for two children, and HUF 220,000 (EUR 550) per child for three or more children, while in Romania the maximum tax base is EUR 25 for one child, EUR 47 for two children and EUR 67 for three children. Hungary has a much more family-support-based tax system, he said.
Márton Nagy said the Hungarian economy is also stronger because 844,000 people in Romania receive the minimum wage, 18.7 percent of the workforce. In contrast, in Hungary, 214,000 people earn a minimum wage (4.6 percent of the employed) and 324,000 earn a guaranteed minimum wage (6.9 percent of the employed). In relative terms, more people earn a minimum wage in Romania than in Hungary.
“According to the latest data, the effective Hungarian minimum wage is the 17th highest in the EU and among the highest in the region, ahead of the Czech Republic, Slovakia, Romania and Bulgaria. The Romanian labour income data are sample-derived estimates, while the domestic one is based on institutional data sources, so the domestic statistics are much more reliable,” he told Index.
From taxes and salaries to cost of living and family benefits, an insightful comparison between Romania and Hungary reveals slight contrasts in quality of life. While it is an ambitious commitment to demonstrate which of the two countries offers a better life, a video showcased some interesting points.
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The Hungarian forint plunged to a new two-year low against the euro on Monday morning, briefly reaching an exchange rate of 412.5. Although it attempted to stabilise and regained some ground to 411.7 later in the day, concerns about monetary policy and economic factors continue to weigh heavily on the currency. Meanwhile, external developments, including the nomination of Scott Bessent as U.S. Treasury Secretary by President-elect Donald Trump, added to the volatility.
Key factors behind the forint’s depreciation
The Hungarian forint’s recent struggles are not isolated incidents but part of a broader trend influenced by both domestic and international factors. Over the weekend, global markets reacted strongly to the announcement of Scott Bessent’s nomination, causing a chain reaction that included weaker U.S. Treasury yields, a declining dollar, and gains for emerging market currencies, Portfolio reports. However, the Hungarian currency remained under pressure due to specific domestic economic challenges.
One significant issue is the expectation of future monetary easing by the Hungarian National Bank (MNB). Current forward-rate agreements suggest that markets anticipate a 50-basis-point rate cut within six months and a potential total reduction of 75 basis points within nine months.
One of the unique aspects of the forint’s decline on Monday was its contrast to other regional currencies. While the Polish zloty, Czech koruna, and Romanian leu showed resilience against the euro, the forint’s weakness was exacerbated by speculation about potential changes in the Hungarian National Bank’s leadership. Reports suggest that Finance Minister Mihály Varga may replace György Matolcsy as the central bank governor, fueling expectations of a monetary policy shift. This speculation, combined with anticipated rate cuts in 2024, has raised concerns about the stability of the forint and its appeal to investors.
Economic and geopolitical context
As we reported before, the forint’s depreciation has been exacerbated by the ongoing war in Ukraine, which has strained regional economies. Since January 2022, the forint has lost significant value, with its exchange rate against the dollar rising from 324 to over 400 at its peak. Contributing to this are Hungary’s strained relations with the European Union, including the withholding of EU funds and concerns over Hungary’s close ties to Russia. These factors have fueled fears of economic instability, further driving down investor confidence.
Additionally, weak economic indicators, such as a lower-than-expected German Ifo index, have done little to support the forint. Hungary’s central bank has been criticised for its monetary policies, with earlier decisions to maintain low interest rates reducing the attractiveness of Hungarian assets.
The trade-offs of a weak forint
While a weaker forint could benefit exporters by making Hungarian goods more competitive on global markets, it has significant downsides. Chief among them is the impact on inflation, which remains one of the highest in the European Union. Imported goods and services have become more expensive, placing additional strain on households and businesses.
Recent trends and outlook
Despite Monday’s plunge, the Hungarian currency showed some signs of resilience later in the day, briefly recovering below 411 against the euro. However, analysts caution that the currency remains vulnerable. The MNB’s interest rate strategy and Hungary’s broader economic policies will play a critical role in determining whether the forint can regain stability or faces further challenges in the coming months.
In the broader context, experts like Molnár Dániel from the Makronóm Institute highlight that the government and the MNB currently do not have a specific exchange rate target, Index reports. However, a significantly weaker forint could have inflationary consequences through higher import costs, eroding confidence in forint-denominated assets. Molnár noted that in cases of further weakening, the central bank might intervene with measures, including verbal assurances or more stringent monetary actions, to maintain financial stability and meet inflation targets.
As of now, the Hungarian forint’s future appears uncertain, caught between external pressures and domestic policy debates. The markets will be closely watching developments, particularly around the central bank’s policy direction and Hungary’s geopolitical positioning, for clues on the forint’s trajectory.
The Council of the European Union announced on Monday that it has approved the joint text of the 2025 EU budget.
Commitments are set at EUR 192.8bn and payments at EUR 149.6bn in the text.
Péter Benő Bánai, a state secretary of the Finance Ministry of Hungary, which holds the rotating presidency of the Council of the EU, said the 2025 budget would allow the EU to focus on its priority areas while ensuring a prudent and realistic approach to spending taxpayers’ money.
Representatives of employers, unions and the government signed an agreement on minimum wage increases over the next three years on Monday.
Under the agreement, the minimum wage will rise by an annual average 12pc over the next three years, increasing 9pc to (EUR 706) HUF 290,800 in 2025, 13pc to 328,600 (EUR 798) in 2026 and 14pc to 909 in 2027.
The minimum wage for skilled laborers will rise by 7pc to 348,800 in 2025.
The sides aim to boost the minimum wage to 50pc of the average wage by the start of 2027. They commit to boosting employee remuneration based on economic growth and business efficiency and productivity improvements.
After the signing, Prime Minister Viktor Orbán said the agreement was based on the assumption that peace would be achieved in 2025 and economic development would advance accordingly. He added that GDP growth over 3pc was “realistic” in 2025.
Acknowledging that the agreement was based on an optimistic scenario, he said that an override clause had been included allowing modifications in case of contingencies. He added that the government trusted that activating the clause would not be necessary.
Orbán said implementing the agreement would not be easy, adding that repeating the economic performance of 2024 and 2023 would be insufficient to justify the wage increases. Management and workers “need to do more for economic growth than in the preceding years.”
He said that the minimum wage, adjusted for inflation, was expected to climb by 29pc.
Orbán augured a “fantastic” year in 2025 with economic growth supported by a “boom” in state investments. He said 300 new investment, with a combined value of EUR 19.72bn (HUF 8,100bn), would start next year, pumping HUF 450bn into the economy in 2025. He added that the upgraded Budapest-Belgrade rail line would be completed in 2025, while big factories would be inaugurated in Győr, Szeged and Debrecen.
He said SMEs would benefit from the Demjan Sandor Programme that would make EUR 3.41bn (HUF 1,410bn) accessible to local businesses, while young workers could avail of a zero-interest credit scheme and employers could apply tax preferences to more non-wage benefits for housing.
Orbán said the government wanted to see the average wage rise to HUF 1 million/month “in the foreseeable future”. He added that the government was ready to take steps to support businesses in achieving that goal.
Orbán acknowledged the work of National Economy Minister Márton Nagy and Finance Minister Mihály Varga at the wage talks.
László Perlusz, the chief secretary of business association VOSZ, said the agreement was “extraordinarily ambitious”.
Melinda Mészáros, the head of unions association Liga, noted that the agreement allowed for corrections if macroeconomic assumptions diverged from GDP or wage developments.
Hungary is a popular tourist destination because it is perceived as a safe place, but one question arises: how long can this be maintained when there is a huge police shortage?
Police shortages
An article by HVG reports that police shortages could be much higher than the officially published police figures, according to trade unions. They say the government is hiding the problem and that in the central part of the country, for example, they can often only ensure adequate numbers by sending uniformed officers from other parts of the country.
Official figures show a shortfall of only 4-5,000, with a 91.3 percent saturation rate, yet there are reports that fish guards have been deployed to patrol some areas.
Police presence
It also tells us that Isaszeg, for example, which is part of the Budapest agglomeration, has only sent patrols to its 12,000 residents when the municipality pays millions extra to the police. This also means that in Hungary, police presence in cities is not included in the basic service.
Additionally, a key element of the police shortage is that, since the border police were disbanded under the first Orbán government, the police are still protecting the southern border from migration pressure, where they are being deployed. In addition, the government’s policy also requires police officers to serve abroad, for example, in the Balkans, in the fight against migration, while there are not enough local police.
Low pay, low number of applications
The situation is no better regarding police recruitment: around 2,000 police officers are recruited yearly. The 10-month patrol training course is attended by 500-700 people a year, while the two-year officer training course attracted thousands more a few years ago. This September, only 116 people started their studies at police technical schools, HVG reported, citing the National Police Headquarters.
In an interview with RTL last year, police human resources chief Csaba Czene said that, including all training and recruitments, 1,000-1,100 new police officers are recruited each year. This also means that they can broadly compensate for those leaving, but he admitted that the other sectors have a solid drain, especially in Budapest and the central part of the country.
Police salaries are not very attractive, despite pay rises in recent years, because much of them have been eroded by inflation: the average salary for professional staff is around HUF 470,000 net (EUR 1,100), including bonuses.
Firefighters have the same problem
In fact, the problem is not unique, the fire brigade has an official understaffing of 10 percent, but the union understands that there are municipalities where the problem is much greater. The firefighters’ union said that in Debrecen, Hungary’s second-largest city, a quarter of the staff is missing.
The Hungarian forint has depreciated significantly in recent years, especially following Russia’s invasion of Ukraine. Compared to other Eastern European currencies, the forint experienced a sharper decline due to factors such as long-term central bank policies and Hungary’s geopolitical challenges. Although recent measures by the Hungarian National Bank (MNB) have helped stabilise the currency, its value remains weaker compared to its past levels, raising questions about the effectiveness of monetary strategies.
Post-invasion decline
According to an experts’ report on Telex, in the wake of the Russian invasion of Ukraine, the forint suffered a dramatic loss in value. At the start of 2022, one US dollar was worth HUF 324, but by 31 December 2022, it had risen to HUF 373. The currency hit its lowest point in October 2022, exceeding HUF 400 per dollar. While the forint has since regained some strength, it continues to underperform when viewed over a broader timeframe.
Comparison with regional currencies
When compared to other regional currencies like the Czech koruna, Polish złoty, and Romanian leu, the forint’s depreciation stands out. While all these currencies weakened during the war, none experienced declines as severe as the Hungarian forint.
Central bank policies and real interest rates
One of the primary factors behind the Hungarian currency’s weakness is the Hungarian National Bank’s monetary policy. For years, the MNB maintained low nominal interest rates, especially when adjusted for inflation (real interest rates). Between 2017 and mid-2023, Hungary’s real interest rates were often below those in the United States, reducing the appeal of Hungarian investments for foreign institutional investors. This dampened demand for the forint, contributing to its decline.
Impacts and risks
A weaker forint has both advantages and disadvantages. On the positive side, it can boost Hungarian exports by making them cheaper on global markets, potentially driving job creation. However, the prolonged depreciation also fuels inflation, which has been among the highest in the European Union.
External factors further exacerbated the forint’s decline in 2022, such as delays in EU funding and concerns over Hungary’s close ties to Russia, which unsettled foreign investors.
Recovery and stabilisation
By late 2022, the MNB shifted to a more aggressive policy, raising interest rates significantly. This resulted in higher real interest rates, which eventually surpassed those in the US by the end of 2023. The stabilisation of the forint supports the view that past monetary policy decisions were a key driver of its earlier depreciation.
Conclusion
While the Hungarian currency has shown signs of recovery, its long-term depreciation reflects a mix of domestic policy decisions and external economic challenges. For the currency to achieve sustained stability, a balanced approach to monetary policy and enhanced investor confidence are crucial.
With the policy of economic neutrality and the government’s strong mandate, Hungary will be able to stay out of the economic cold war despite external pressure, Finance Minister Mihály Varga said at an event in Zalakaros, western Hungary, his ministry said on Saturday.
The finance minister said Hungary had consciously followed the path of connectivity since 2010, which has yielded its results by now.
Thanks to the work-based and open economic model launched a decade ago, one million new jobs have been created, real wage growth has been around 60 percent since 2010, and economic growth has more than tripled, he said.
Vargasaid these results have been possible because the government recognised in time that it was not enough for the Hungarian economy to look in one direction, other markets were also needed, and thus the policy of opening to the East was born.
Photo: MTI
It is thanks to this, among other things, that Hungary’s foreign trade doubled over one decade and three-quarters of our products are exported, Varga said.
He warned that all trade data show that the West cannot exist without the East, and therefore the isolation of Europe is not only a dead end, but in reality it is not even possible.
Economic neutrality key
On economic neutrality, Varga said it is also an important element in Hungary’s financing as the structure of the state debt has been radically transformed since 2010. The share of Hungarian families has been increased from 3 percent to over 20 percent while the share of foreigners has been reduced from 65 percent to below 40 percent, while external sources have been diversified, involving China, Japan, and also Qatar into financing the state debt.
To sum it up, Varga said Hungary is of the position that cooperation, rather than the formation of blocs should be the norm, and efforts should be made to ensure that Europe also returns to this as soon as possible.
Mutual understanding essential for successful EU, EU minister said
Mutual understanding among European Union member states is essential for the success of the bloc, János Bóka, the EU affairs minister, said on Friday, adding that the work done by researches contributed significantly to this understanding. Apart from the specific tasks it comes with for the government, Hungary’s presidency of the Council of the European Union also provides scientific communities, professors and experts with research topics, Bóka said on Facebook after the studies on Hungary’s EU presidency compiled by the Central European Academy’s (CEA) international research groups became available.
He said knowledge of the current research studies was crucial in order to understand the complex economic, social, cultural and political trends that come with European integration. Bóka said that in 2023 the CEA set up international research groups comprising foreign and Hungarian professors and researchers to analyse the priorities of the Hungarian EU presidency. The researchers approached the presidency’s priorities from the perspective of the central European scientific communities, he said, noting that multiple conferences were organised and papers published.
Of the more than 120 studies carried out by the central European research community, five volumes were put together, which mainly dealt with the supranational interpretation of the rule of law, economic governance, demography, migration and the common security and defence policy.
Read also:
PM Orbán: Hungary must remain neutral, 2025 will bring “fantastic results”! – read more HERE
Hungarian government unveilsnew economic initiatives: Blue-collar loans, home renovation subsidies, and family tax credits
Hungarian researchers have worked out a methodology for replacing GDP with a “sustainability turnaround” indicator showing the negative effects of economic activity while providing additional data needed for effective intervention, János Áder, the former president of the republic, said on Friday at the plenary session of the World Science Forum (WSF) held in Budapest.
“The Hungarian proposal is a combined application of three methodologies: sGDP, a sustainability performance indicator, and the well-being indicator beyond GDP for interpreting the sustainability turnaround,” he said.
This gives a bigger picture for understanding economic, social and environmental processes and for aiding decision-making while reducing risks, Ader, who is president of the Kék Bolygó (Blue Planet) foundation, said.
At today’s WSFplenary session, scientists, politicians and representatives of international organisations discussed the results of this autumn’s UN Summit of the Future and the implementation of the Pact for the Future adopted by world leaders.
World Science Forum in the Hungarian Parliament. Photo: MTI
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Former Hungarian President Áder: ‘Apology, forgiveness sign of strength, not weakness’ – read more HERE
Former President Áder at World Water Forum: Water crisis ‘not eased by regional, global rivalry’ – details in THISarticle
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.
We wroteyesterday 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.
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
The two most dangerous months of the Russia-Ukraine war “are ahead of us” and Hungary “must continue to pursue a sober kind of politics”, Prime Minister Viktor Orbán said in an interview to public radio on Friday. The PM also announced that he is inviting Israeli counterpart Benjamin Netanjahu to visit Hungary.
Trump will bring peace but we have to wait for it, Orbán says
Orbán said that peace was within reach thanks to the election victory of Donald Trump, but it was clear that the outgoing Democrats wanted to leave behind a “more serious legacy” compared with the situation as it was when Trump won.
He said Hungary’s fate was directly at stake in this conflict, so it would act in a thoughtful, predictable and calm manner, Orbán said.
Noting that Ukraine is Hungary’s neighbour, he said the conflict was not escalating a distant part of the world and war developments in a neighbouring country were immediately palpable. Furthermore, ethnic Hungarians live in Transcarpathia, “so the threat is direct”, he added.
Orbán giving interview. Photo: MTI
By now they have started using weapons that can easily reach countries outside the territory of Ukraine, primarily neighbouring countries, he said. “These reports concern us and are not just about international diplomatic conflicts; they are about direct Hungarian interests and Hungary being under the threat of war,” he added.
Commenting on Trump entering office on January 20, he said “dawn will arrive all of a sudden” but “we are in the darkest hour … and until then we are living in an even greater darkness than before.” The two most dangerous months of the war “are ahead of us”, he said.
Without the Americans Ukraine will collapse
The prime minister said the situation was clear in military terms: if the Americans stopped backing Ukraine, Europe would not have the slightest hope of successfully supporting Ukraine, not to mention the financial-economic consequences of a lost war, he added. Orbán said Hungary would be guided by this thought in the next two months, until Trump enters office: to survive by pursuing a smart and sober kind of politics, he said.
In response to a question about the threat of introducing heavy weapons, he said there were significant risks.
He noted that within 24 hours of the US presidential election results became clear, the German government collapsed.
Orbán and Scholz with Edi Rama in Budapest. Photo: FB/Orbán
“We Hungarians are not used to that; we are a country that pursues sovereign foreign policy, and regardless of how much the world cracks on all fronts, we’ll always make decisions based on our national interest, and we won’t tie our fate to other governments,” he said.
He said developments in America could have an almost immediate effect on the behaviour of “not-insignificant” western European governments and countries. This was because when the Americans made certain steps, then certain countries felt an obligation to follow the American directive, he added.
Empty talk and idling in western Europe
Orbán said the weapons that the Americans had allowed the Ukrainians to use were extremely complicated and reports suggested that the Ukrainians were unable to reach their target with them independently and without the involvement of US expertise. This was why the Russians had responded so suddenly and powerfully, he added.
Orbán also said that the weight and significance of remarks made in western Europe and in Russia were different, and western European decision-makers had not considered this seriously enough.
Putin and Orbán in July in Moscow. Photo: FB/Orbán
“There’s a huge amount of empty talk and idling in western Europe, with statements made that have no direct consequence. European leaders in important positions easily allow themselves to make tirades on geopolitical and military matters, thinking that these are merely a matter of communication, to make a domestic political point,” he said.
He added that the Russian system of communications was very different. “When the president says something, it has weight and consequence. When the Russians amend the doctrine on the use of nuclear force, it is not only a communications tool or trick,” he said.
Putin’s words are not tricks
Referring to Russian President Vladimir Putin’s recent statement under which Russia could consider as targets countries sending such equipment to Ukraine, Orbán said: “This isn’t a communications trick; we must keep our wits about us.”
He said Russia fundamentally made its policies and sought its place in the world based on military power. “With one of the strongest armies in the world and the most modern, most destructive weapons are crucial for its vision of the future,” he said, adding that “when they say something on this subject, it should be understood the way they say it.”
In the next two months, “the logic of war should be taken into consideration, carefully weighing each word and sentence and proceeding in line with common sense rather than on basis of the political rules based on western European communications,” Orbán said, adding “or else we’ll be in trouble.”
Orban said he supported that “the number and size” of current conflicts in the world should be reduced through every measure possible. “But international institutions in fact fail to act carefully in their decision-making,” he added.
Orbán said he is inviting Israeli counterpart Benjamin Netanyahu to visit Hungary.
Orbán outraged at ICC ruling
Referring to an arrest warrant against the Israeli prime minister issued by the International Criminal Court on Thursday, Orbán called the move “outrageously brazen and cynical”, amounting to “interference in an ongoing conflict in legal disguise” and motivated by politics.
Orbán said this was in itself wrong and would completely discredit the reputation of international law and could “add fuel to the fire”. He said he had “no other choice but to oppose” the ruling.
Referring to the invitation, Orbán said he would guarantee that the ICC ruling would not be applied in Hungary, adding that “we will not follow its provisions”.
“We solely consider the quality and state of Israel-Hungary ties … Israel’s prime minister will be surrounded by suitable security to conduct substantive talks in Hungary,” he said.
According to Telex, the invitation received a warm welcome in Tel Aviv. The Embassy of Israel in Budapest wrote in a statement, that Hungary chose the right side of History in this case and PM Netanyahu appreciates Orbán’s gesture.
PfE is important player
Meanwhile, Orbán said the goal was to make the Patriots for Europe the most influential party family in the European Parliament by the end of the current term. He said that this required building alliances and using political tools within the European Parliament to increase their power, adding that he expected agreements and group alliances to significantly strengthen the Patriots’ influence on decision-making.
Orbán said that in international politics “you have as much influence as you have strength”. It was a good start, he said, when “we kicked in the door of the saloon bar of European politics”.
“The representatives of common sense turned up,” he added, which was enough to set up the third largest group.
The Patriots represented “occasionally raw but clear positions” that differed from the mainstream, the former centre, regarding migration and child and family protection, for instance, he said.
Orbán said the “period requiring behind-the-scenes deals in the European Commission” was over and it is now possible to return to “the period of clear, straight talking”. It is necessary to declare that they want to strengthen the group, he added.
Concerning Eurasian cooperation, Orbán said the subject had earlier been given “much less weight” in education than ties between the United States and Europe, whereas Europe has “the most organic ties” to the regions east of Hungary rather than “to the far side of the ocean”. Those regions, he said, included the Caucasus, China, India, Korea, and Japan “not just Russia”.
“It is time we talked more about Europe’s integral unity with Asia”
“Changing directions is not easy in Hungarian public thinking,” Orbán said, adding that he had three maps of the world in his study, one with Europe, the second with the US and the third with Asia at its centre.
“We Hungarians do not look at the world like that; we are accustomed to a single viewpoint … I think it is time we talked more about Europe’s integral unity with Asia, in education, in public discourse, and perhaps in interviews like this one,” the prime minister said.
Orbán said reorienting Europe and Hungary was an ongoing assignment that should happen according to “our own way of thinking” as well as in terms of economic, trade and investment policy.
The prime minister said those who opposed the government’s National Consultation survey were not “actually interested in people’s opinions” and saw no direct link between the will of the people and political decision-making. He called that attitude “a kind of disdain”.
Coarse and crude public language
“A negative and threatening tone arising from contempt” had emerged in Hungarian politics, he said, adding that politicians who were coarse and crude in their public language should “apologise and withdraw”.
He also said aggression arising from such verbal expressions should be prevented “because we don’t need a war in public life … we are a community, and we need to treat each other fairly.
Meanwhile, the prime minister said a key plank of the government’s new economic action plan was to increase the purchasing power of wages.
In Hungary, employers and employees come to an agreement on the minimum wage, he said, but the government puts its seal on the agreement. If the deal is beyond the reach of the two sides then the government “helps out”. He added that the government had stepped into the latest round to secure a three-year wage deal, and this would soon be ratified.
Accordingly, the minimum wage in 2025, 2026 and 2027 will grow above the rate of inflation, so the purchasing power of wages will increase rather than the opposite, he said. Inflation, Orbán added, was expected to be between 3 and 4 percent against wage growth of above 10 percent. “We want to maintain [this] momentum…” he said.
UPDATE 1: Foreign Minister Szijjártó calls arrest warrant issued against Israeli PM absurd
Péter Szijjártó, the foreign minister, has called the International Court of Justice arrest warrant issued against Israel’s prime minister and defence minister “shameful and absurd”. Commenting on a phone call with Israeli counterpart Gideon Sza’ar, in which he assured him that Hungary objected to the international court system being turned into a political tool, Szijjártó said in a Facebook post on Thursday: “This has now happened.” “This decision brings shame on the international court system by putting the prime minister of a country subjected to a diabolical terrorist attack” on the same footing as the terrorist leaders of that attack. “The decision is unacceptable,” he declared.
UPDATE 2: ICC arrest warrant ‘mockery of the law” Hungarian Jewish Mazsihisz says
The Federation of Hungarian Jewish Communities (Mazsihisz) has criticised the International Criminal Court’s arrest warrant against Israel’s prime minister and defence minister as a decision that “makes a mockery of the law” and “tramples on justice”. Mazsihiszsaid in a statement on Thursday that it concurred with Israeli President Isaac Herzog that the warrants against Benjamin Netanyahu and Yoav Gallant were “outrageous” and had been issued “in bad faith”.
They said neither the Israeli prime minister nor the defence minister were guilty of genocide, crimes against humanity or war crimes, but were commanding the Israel Defence Forces’ fight in defence of the Jewish people in response to Hamas’s terrorist attack against Israel in October last year.
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Shocking: Forint in free fall, historic lows against the American dollar, GBP, CHF, PLN! – read more HERE
The considerable strengthening course of the American dollar following the victory of Donald Trump makes it hard for the emerging currencies to keep up. Since the Eurozone PMI hit a 10-month low, the euro started to fall against the dollar, worsening the above-mentioned situation. However, the forint performs badly not only against the dollar. The Hungarian currency reached a historic low against the Swiss franc (CHF), the pound sterling (GBP), and even the Polish zloty (PLN).
According to portfolio.hu, the last time the euro was this weak was in November 2022. In October 2022, the forint reached an all-time historic low against the American dollar and the euro. However, thanks to the intervention of the Hungarian National Bank increasing the base rate sky-high, the Hungarian forint’s free fall could be stopped.
Now, the forint exceeds new historic lows against the USD, GBP, CHF and PLN daily.
Photo: FB/MNB
Historic lows against the American dollar, GBP, CHF, PLN
Currently, the Hungarian currency stands at 395.5 against the American dollar. The last time the forint’s depreciation reached such a shocking level against the American currency was in December 2022. The all-time historic low against the dollar was 435.5 on 8 October 2022.
Prospects are grimmer in the case of the Swiss franc. Following the conversion of CHF loans to forint, Hungarians do not follow the exchange rate changes of the CHF. Data show that the last time the Swiss franc was so strong against the forint was in September 2022 with HUF 437/1 CHF. Now, the exchange rate is at an all-time historic low above HUF 444/1 CHF.
Photo: facebook.com/jegybank
The forint reached an all-time low against the pound sterling in November as well. Currently, the exchange rate is above 495.5. On 10 December 2022, it stood at 487.1. However, the current all-time historic low is the consequence of a constant and gradual weakening, while the 2022 low was just a swing since on 17 December 2022, the exchange rate was “only” 464.
Source: Google.
Concerning the regional currencies, the Polish zloty also performs better against the forint and stands at a historic high with HUF 94.7/PLN 1 at the moment, even though the strengthening of the dollar is bad news for all emerging currencies like the Polish zloty.
György Matolcsy, the governor of the Hungarian National Bank. Photo: FB/MNB
Forint eases on interbank forex market
The forint traded at 411.37 to the euro around 10:00 in the morning on Friday, edging down from 411.06 late Thursday. The forint weakened to 394.00 from 391.96 against the dollar. It slipped to 444.13 from 442.35 to the Swiss franc, the MTI wrote.
BUX rises in early trade
The Budapest Stock Exchange’s main BUX index was up 0.29pc at 79,460.46 about 15 minutes after the opening bell on Friday. OTP Bank edged up 0.09pc to HUF 21,620 and oil and gas company MOL rose 0.37pc to HUF 2,686. Pharma share Richter climbed 0.37pc to HUF 10,850 and Magyar Telekom advanced 0.98pc to HUF 1,240. The BUX finished the session on Thursday up 0.17pc. Turnover reached HUF 11.3bn, MTI added.
At the latest meeting of the Permanent Consultative Forum for Hungarian Industry and Government, another meaningful step was taken towards determining the 2025 minimum wage and guaranteed minimum wage. While a final agreement has not yet been reached, the drafting of the final text is already underway which is an encouraging sign of progress.
Throughout the discussions, both unions and employers have made compromises to close the gaps that have surfaced in recent weeks. According to 24.hu, optimism is growing, fuelled by the participants’ willingness to meet halfway and the emerging framework of a three-year wage agreement that could bring much-needed stability to the labour market.
Source: Pixabay
Economic challenges and considerations
Economic realities have significantly shaped the negotiations. Third-quarter GDP data revealed weaker-than-expected performance, putting added pressure on discussions. Employers, facing these economic challenges, struggled to support the initial proposal for a double-digit wage increase.
While the idea of a 10% rise was widely seen as too steep, a more modest 8% increase was deemed feasible by many. That said, employers have not ruled out higher increases entirely, but they have set clear conditions. Many are looking to the government for support, such as tax cuts, to offset the financial impact. The final outcome will heavily depend on how these economic factors are managed and whether unions’ demands can align with what employers and the government find sustainable.
Source: Pixabay
The current state and goals
There is broad agreement between trade unions and employers on the need for a long-term wage framework, with the ambitious goal of raising the minimum wage to 50% of the average gross wage by 2027. Achieving this will require a concerted effort from unions, employers, and the government. A multi-year agreement could provide much-needed stability, offering businesses and workers predictable wage growth.
Under current plans, the minimum wage is set to rise by 10%, with the guaranteed minimum wage increasing by 7% from the 1st of January 2025. According to Világgazdaság, this would see the minimum wage grow from its current gross value of HUF 266,500 (EUR 655) to HUF 293,150 (EUR 720), and the guaranteed minimum wage increase from HUF 326,000 (EUR 800) to HUF 348,820 (EUR 850). These changes will affect a substantial number of workers—particularly the guaranteed minimum wage increase, which could impact 700,000 to 750,000 individuals.
While these adjustments will place a considerable strain on businesses, they also mark a step closer to aligning Hungarian wages with European standards. Over time, these increases could improve the quality of life for low-wage workers and contribute to higher average earnings, ultimately benefiting the broader economy.
The negotiations so far
Negotiations are set to resume on Wednesday, with participants expected to consult further with their respective organisations beforehand. The League of Trade Unions’ leader has expressed confidence, calling an average annual increase of 12% over three years a realistic target. Encouragingly, all sides appear to be converging on their positions. While details remain under wraps, a growing willingness to compromise is evident. Whether all stakeholders ultimately agree remains uncertain, but optimism surrounds the possibility of finalising key issues in the next round of discussions.
The Hungarian Tourism Agency said government proposals on service fees and tips would strengthen the competitiveness of the catering sector in a statement issued on Tuesday.
Proposals on service fees and tips
The agency noted that the National Economy Ministry had recently proposed capping service fees at 15pc for private individuals and 20pc for corporate functions.
Hungarian Tourism Agency head László Könnyid said the higher cap on service fees for corporate functions would raise waitstaff’s remuneration and contribute to employee retention.
He added that the 15pc cap on service fees for private individuals could boost the competitive position of smaller, family-owned businesses.
A ministry proposal requiring financial institutions to make technical changes allowing guests to tip with their bank cards, while the government exempts tips from taxes, will improve employers’ cost optimisation, Konnyid said. He added that tips were an “important motivation” for waitstaff.
The Paks Nuclear Power Plant plays a pivotal role in Hungary’s energy sector as its sole operational nuclear facility. Comprising four VVER-440 reactors built with Soviet-era technology, Paks generates nearly half of Hungary’s electricity. Over the years, the plant has undergone significant upgrades, boosting its capacity to 2,000 MW.
The future of Hungarian nuclear energy lies in the Paks II expansion project, which aims to construct two additional 1,200 MW reactors designed by Russia. Funded through a combination of a Russian state loan and Hungarian resources, this project has received European Commission approval. The primary aim is to enhance energy independence as the existing reactors approach the end of their operational lifespan by the late 2030s.
Photo: FB/Paks NPP
The benefits of nuclear energy
Hungary’s nuclear ambitions are not without challenges. While nuclear energy is promoted as a cost-effective and environmentally friendly solution, the Paks II project has faced criticism over financial transparency and potential cost overruns. Critics are also concerned that the focus on nuclear energy might divert funding away from renewable energy initiatives. Furthermore, public support for nuclear energy has waned since the Fukushima disaster, further complicating the discourse.
Photo: FB/Paks NPP
The Paks Nuclear Power Plant’s new partner: Serbia
According to Szabad Európa, Serbia is looking to diversify its energy portfolio, with President Aleksandar Vučić recently revealing plans to acquire up to a 10% stake in Hungary’s Paks Nuclear Power Plant. During a visit to Budapest, Vučić proposed the idea to Hungarian Prime Minister Viktor Orbán, emphasising that Belgrade would be prepared to pay the full market price for the stake. However, the Hungarian government has yet to respond.
This move aligns with Serbia’s broader goal of reducing its heavy reliance on coal-fired power plants and Russian natural gas. Despite lacking its own nuclear power facilities, Serbia has been making strides in energy diversification. The country has expanded its gas network, including connections to the Bulgarian pipeline, which offers access to Azerbaijani gas, and the LNG terminal in Alexandroupoli, Greece.
Serbia’s interest in the Paks Nuclear Plant could signal a new chapter in Hungarian-Serbian collaboration. However, it remains unclear whether Vučić’s proposal pertains to the existing Paks plant or the upcoming Paks II project. For Hungary, the potential involvement of a foreign partner introduces strategic and geopolitical considerations, especially given the Russian ties underpinning the Paks II project. Serbia’s overture not only reflects its pragmatic approach to energy diversification but also highlights the evolving dynamics of regional energy politics. As Hungary evaluates this proposal, the outcome could reshape the energy landscape in the Balkans and beyond.
This is not the first time a foreign country has become involved with the Paks Nuclear Power Plant. As we detailed in a previous article, both France and Russia are also set to contribute by supplying fuel rods for the facility. This underscores the growing international collaboration centred on the plant, further establishing it as a focal point of multinational efforts in the energy sector.
The Hungarian Banking Association said it was a “partner” in efforts to help young Hungarians buy their first home in a statement issued on Monday.
Banking association to help first-time homebuyers
The association acknowledged the national economy minister’s recent announcement on the introduction of a voluntary 5pc cap on home mortgages, adding that the cap would apply to first-time homebuyers under 35 for purchases of homes up to 60sqm with an A+ energy rating at a cost of no more than HUF 1,200,000/sqm.
The voluntary cap is expected to be offered between April 1 and October 31, 2025 and remain in place for the first five years of the terms of loans signed during the period.
The association said it trusted that the low rates would encourage the construction of new homes.
Hungarian government welcomes voluntary mortgage rate cap
The government welcomes the Hungarian Banking Association’s position supporting a voluntary 5pc cap on mortgage loans for young, first-time homebuyers, the National Economy Ministry said on Monday.
The ministry acknowledged the association’s statement, issued earlier on Monday, offering the mortgage cap to first-time homebuyers under 35 from April 1 until October 31, 2025, conditional on purchases of homes no larger than 60sqm at a price of no more than HUF 1,200,000/sqm.
To support the supply side on the home market, the ministry said the government would launch a new home development capital programme under which local property funds could get up to HUF 30bn of state support as long as the state’s share of the funds doesn’t exceed 70pc. The funds may be channeled to construction of new homes, rental homes or student dormitories. Over HUF 100bn is expected to flow into the property market as a result, the ministry said.
Next year’s “new economic policy” budget is based on a policy of economic neutrality, Finance Minister Mihály Varga said in an interview with public radio broadcast on Sunday.
Varga talks about the 2025 budget
Varga said the three “pillars” of the 2025 budget were boosting Hungarians’ purchasing power, ensuring affordable housing and scaling up SMEs with the Demján Sándor Programme.
He added that the budget would lay the foundation for a growth-based, multi-year wage agreement that would raise the monthly minimum wage to HUF 400,000 and the average wage to HUF 1 million.
The budget assumes 3.4pc GDP growth.
Varga said that the threshold for tax preferences for employers’ housing support for employees would be raised by HUF 150,000/month, while the government aimed to ensure “feasible” home lending rates for young people.
Tax allowances for families with children are set to double, while allowances for first-time marriages and PIT exemptions for all under-25s and women under 30 having children would leave around HUF 440bn with families in 2025, he added.
He said the general government deficit, relative to GDP, would narrow from 4.5pc in 2024 to 3.7pc in 2025 and to 2.9pc in 2026.
Varga said that HUF 770bn would be earmarked to finish up investments that had already been started, such as developments at the Diósgyőr castle and railway upgrades in Záhony (NE Hungary) and around Szeged (SE Hungary).
New investments with a value of HUF 480bn will be launched, including the construction of a new campus for Budapest’s Óbuda University, the establishment of a national memorial in Mohács (S Hungary) and a sewage treatment plant in Karcag (E Hungary), he added.
Varga noted that a separate fund to preserve regulated utilities prices for households would be eliminated from the budget, but the regulated prices would remain in place, funded from allocations in various ministerial chapters, he said.
The government has paid the October wages of employees at steelmaker Dunaferr after owner Liberty Steel failed to, the National Economy Ministry said on Friday. The steelworks is in big trouble.
Around HUF 2bn in wages were paid to close to 3,500 employees from the Wage Guarantee Fund. The ministry said Liberty Steelhad failed to fulfill its obligations, both with regard to pledged developments at the Dunaújváros steelworks and the restart of production.
Since June of 2023, Dunaferr has received a total of HUF 17.6bn of government support, it added. Liberty Steel acquired the Dunaújváros steelworks in a liquidation procedure.
Dunaújváros steelworks. Photo: FB/MP Dr. Lajos Mészáros
German-owned supermarket chain Lidl Magyarország plans to raise its number of stores from 210 to 250 in the coming years, chairman Zita Szlavikovics said on Friday, marking 20 years in Hungary.
With a nationwide reach, Lidl had 20.8pc market share in September, according to data from GfK, Szlavikovics said. The chain employs 9,500 people and exported EUR 338m of local products to its other Lidl stores last year, she added.
Lidl Magyarország has 487 domestic suppliers accounting for 61pc of inventory, managing director for purchasing Zoltán Nepp said.
Photo: facebook.com/LidlMagyarorszag
Lidl Magyarország had net sales revenue of HUF 1,159bn in its business year ended February 29, public records show.
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Historic Lidl announcement concerning Hungary – read more HERE
