Hungary could adopt the euro by 2030 under the government’s proposed fiscal reforms, Fitch Ratings says. The credit rating agency says Hungary’s budget plans could help it meet eurozone entry requirements. However, high public debt and difficult spending cuts remain significant obstacles.
The assessment, published on October 22, follows the government’s proposed 2027 budget. Prime Minister Péter Magyar’s administration aims to reduce the deficit from an expected 7.5% of gross domestic product (GDP) in 2026 to 4.9% in 2027. Further reductions are planned through 2030.
Hungary Euro Adoption by 2030 Depends on Budget Cuts
Hungary’s proposed fiscal strategy includes spending reductions, new tax revenue and lower borrowing costs. Fitch estimates that planned expenditure cuts would save approximately 1.5% of GDP in 2027. The expiration of temporary government programs could deliver another 1.4% in savings.
The government also expects tax increases to generate revenue equivalent to about 1% of GDP. These measures include changes to corporate taxation, a proposed wealth tax and higher levies on energy companies. Spending reductions would affect public investment, government operations and selected business subsidies.
Under the government’s projections, the deficit would fall to 4% of GDP in 2028 and 3.4% in 2029. The 2030 target is 2.8%, below the European Union’s 3% reference value.
Fitch expects a similar trend but anticipates a slower initial improvement. Its forecast puts the deficit at 5.4% in 2027, compared with 7.3% in 2026. The agency also expects the shortfall to fall below 3% by 2030.
Implementing those measures will be challenging. The proposed adjustments involve numerous individual spending and revenue changes, while new commitments could offset some savings. Fitch considers the 2027 budget an important test of the government’s fiscal credibility.
High Public Debt Remains a Major Challenge
Reducing the annual deficit would bring Hungary closer to eurozone eligibility, but debt remains a concern. Fitch projects public debt will peak at 77.7% of GDP during 2027 and 2028. That exceeds the 57.5% median among sovereign borrowers in its BBB rating category.
Hungary’s longer-term debt outlook also depends on economic growth and the forint exchange rate. Currency depreciation could increase the domestic value of foreign-currency debt. Slower economic growth would make it harder to reduce the debt burden.
Fitch says Hungary’s economic growth has trailed similarly rated countries since 2023. The agency identifies weak external demand, policy uncertainty, and delayed European Union funding as contributing factors. Fiscal adjustments have also affected investment.
Economic Growth and EU Funding Could Support Recovery
The Hungarian government forecasts 2.4% economic growth in 2027, with expansion accelerating above 3% by 2030. Fitch’s projections are broadly similar, anticipating 2.5% growth in 2027 and about 3% from 2028.
Investment supported by European Union funding could help strengthen the recovery. The EU recently released €4.2 billion for Hungary under a broader €16.4 billion funding arrangement. Access to the remaining money still requires further approvals.
Fitch expects private consumption to recover, investment to strengthen, and foreign demand to improve, supporting growth. However, delayed funding or weaker economic conditions could complicate the government’s fiscal plans.
Could Hungary Join the Eurozone in 2032?
Meeting the deficit target alone would not qualify Hungary to adopt the euro. The EU’s convergence criteria also cover inflation, public debt, long-term interest rates and exchange-rate stability. National legislation must comply with European monetary requirements.
Countries must generally keep their annual deficit below 3% of GDP and public debt within the 60% reference value. Debt above that threshold may still be acceptable if it is declining sufficiently.
Hungary would also need to participate in the Exchange Rate Mechanism II (ERM II) for at least two years. This arrangement requires exchange-rate stability before a country adopts the common currency.
Political and economic risk consultancy Eurasia Group has identified 2032 as a possible entry date. That scenario assumes Hungary joins ERM II by 2030 and subsequently meets the remaining conditions.
The distinction between meeting entry criteria and adopting the currency is important. Hungary’s euro adoption by 2030 is not a confirmed government timetable for joining the monetary union. The target concerns meeting the membership criteria, while the actual transition could take longer.
For now, the government’s priority is delivering the promised fiscal improvements. Lower deficits, sustainable public debt and stable economic conditions would strengthen Hungary’s position. Whether those changes can support eurozone membership in the early 2030s remains uncertain.
