Hungary could adopt the euro as early as 2032, but Brussels-based economists warn that meeting the official entry criteria will not guarantee success.
Hungary may be moving closer to euro adoption, but a new study by Brussels-based economic think tank Bruegel warns that the country must address deeper economic weaknesses before giving up its own currency.
Researchers Zsolt Darvas and Gene Frieda argue that joining the eurozone without thorough preparation could bring painful economic adjustments rather than the stability Hungary hopes to achieve. Although the government aims to meet the Maastricht criteria around 2030, the economists say lasting success depends on more than ticking the boxes, Portfolio wrote in its summary article.
Hungary’s economic weaknesses raise concerns
Hungary’s current account surplus is a relative strength, meaning the country does not currently need net external financing. However, domestic economic conditions are less reassuring. The budget deficit could reach 7.3% of GDP in 2026, while public debt stands at around 75% of GDP. Without significant changes, the International Monetary Fund projects that debt could rise to 88% by 2031.
Productivity growth has also slowed sharply, falling from an annual average of 3.6% in 2001–2008 to just 0.4% in 2022–2025. Meanwhile, the forint’s real appreciation risks undermining the competitiveness of Hungarian exporters and domestic suppliers.
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Five tests Hungary must pass
Bruegel identifies five areas that require attention before the country can sustainably adopt the euro:
- Institutional readiness: Strengthening the independence of the Hungarian National Bank, addressing its negative equity and improving budgetary transparency.
- Sustainable public finances: Reducing the deficit through lasting structural reforms rather than temporary measures.
- Credible inflation control: Ensuring price stability over the long term, rather than meeting the entry threshold temporarily.
- Productivity and competitiveness: Tackling energy dependence, reliance on Germany’s car industry and the limited domestic value added of battery investments.
- Exchange-rate stability: Establishing an appropriate central exchange rate and joining the EU’s ERM II exchange-rate mechanism only when the economy is ready.
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Budget cuts could be the biggest obstacle
The researchers argue that bringing the deficit below 3% of GDP will not be enough. Hungary must also follow the EU-approved spending path to avoid further debt-related procedures that could obstruct euro adoption.
Bruegel recommends reducing poorly targeted business subsidies and interest-rate support, directing household energy assistance towards those most in need, and limiting the 13th-month pension to the average pension level. It also advises abandoning plans for a 14th-month pension.
On the revenue side, the study proposes more progressive personal income taxation, fewer tax breaks and broader wealth taxation. General VAT cuts, however, are discouraged. The government would also need to phase out market-distorting price and interest-rate caps, allowing monetary policy to function more effectively.
Could Hungary adopt the euro in 2032?
According to Bruegel, adoption in 2032 remains possible if Hungary is ready to enter ERM II before 2030 and subsequently maintains exchange-rate stability for at least two years. The researchers recommend a phased roadmap driven by measurable reforms rather than a fixed deadline. Difficult fiscal adjustments should begin within the first 12 months to avoid delaying action until the next election cycle.