Fitch Ratings expects Hungary’s 2027 deficit to exceed the government’s target, complicating its fiscal path toward meeting euro-adoption criteria by 2030 as public debt is forecast to peak above the European Union’s reference level.
The draft budget targets a general-government deficit of 4.9% of gross domestic product (GDP) in 2027, after an estimated 7.5% in 2026, followed by a reduction to 2.8% in 2030. Fitch projects 5.4% in 2027 and 7.3% in 2026, and sees the deficit falling below 3% by 2030. These figures are projections and targets rather than final results.
The plan combines spending reductions equal to 1.5% of GDP, the expiry of temporary and one-off measures worth 1.4%, interest savings of up to 0.2% and new revenue near 1% of GDP, Fitch said. Proposed cuts cover subsidies, government communications, public media, state investment and operating costs. Ministries and state-owned companies face reductions of at least 10% in operating costs.
The government plans higher corporate and innovation taxes, a wealth tax and a levy on energy companies. It also proposes lower income taxes for lower earners, larger family benefits and pension payments, and public-sector pay increases. Fitch said savings from expenditure reviews and efficiency measures remain uncertain, and the government has not announced its 2028 consolidation measures. The agency said delivery of the 2027 target will help show whether the government can carry out its fiscal strategy.
The government estimates 2027 public debt at 77.2% of GDP, while Fitch projects a peak of 77.7% in 2027–2028. That would exceed the EU’s 60% debt benchmark and the 57.5% median for sovereigns Fitch rates “BBB.” Euro qualification also depends on inflation and long-term interest-rate limits, stable exchange rates and laws compatible with EU requirements. Countries must spend at least two years in Exchange Rate Mechanism II (ERM II), following its exchange-rate rules without lowering their currency’s central rate against the euro.
Fitch said Hungary’s growth has lagged that of similarly rated countries since 2023 amid weak external demand, policy uncertainty, delayed EU funding and fiscal tightening’s effect on investment. It forecasts growth of 2.5% in 2027 and about 3% from 2028.
In his base case for the forint’s outlook, Commerzbank analyst Tatha Ghose placed euro adoption in 2032, later than the government’s goal of meeting the criteria around 2030. Earlier coverage of Hungary’s euro timetable examined that projection and the distinction between meeting the criteria and adopting the currency.
The government says it will send the detailed budget document to the Fiscal Council before submitting it to Parliament, with submission planned by the end of October.
