On Monday, Prime Minister Péter Magyar presented the key measures of the 2027 budget drafted by the TISZA government. Here are the key points, as summarized by economx.hu.
The budget projects a deficit of 4.9% of GDP, an ambitious figure that falls below the consensus estimate. Following the announcement, the forint strengthened significantly, though this appreciation has not yet proven to be sustainable.
These are the key points from the prime minister’s nearly two-hour speech:
Changes to spending:
- The family allowance will be doubled.
- The minimum pension will rise from 28,500 HUF to 120,000 HUF; the 13th-month pension and the first weekly installment of the 14th-month pension will remain in place.
- The government is allocating 677 billion HUF for pay raises for more than 600,000 public servants, of which 17% will go to healthcare workers, 17.8% to social services employees, and 15% to law enforcement personnel.
- An additional 510 billion HUF will be made available to fund the healthcare system; municipal budgets will be increased by 64 billion, while the solidarity contribution will be reduced by 62 billion HUF.
- A 100-billion-HUF program for road maintenance and pothole repair will be launched.
Revenue measures:
- Effective January 1, the income tax rate on earnings up to the minimum wage will decrease from 15% to 9%;
- A monthly gross income limit of one million HUF will be introduced for the income tax exemption for mothers; however, this benefit does not apply to mothers over 40 with two children
- The national budget will achieve savings of 1,500 billion HUF
- The wealth tax will generate 200 billion HUF
- Companies with annual revenue exceeding 180 billion HUF are expected to pay a tax rate of 11% instead of 9%
- Savings of 246 billion HUF will be achieved in concession fees
In total, the government would spend more than 2,100 billion HUF (5.79 billion EUR, 1 EUR = 362 HUF) on the listed social and economic measures, though Péter Magyar emphasized that maintaining a balanced budget remains a top priority,
according to the assessment by the investment firm Equilor in its rapid analysis.
Member of the European Parliament Balázs Orbán highlighted the changes to mothers’ income tax exemptions in Péter Magyar’s package of measures, this was a key component of the Orbán government’s family policy. The law at the time provided that all mothers with two children would receive a full exemption from income tax, regardless of age.
Péter Magyar to abolish tax exemptions for Hungarian mothers from January, on orders from Brussels!
Hungarian families will pay the price! https://t.co/CFVUUL1IMF
— Balázs Orbán (@BalazsOrban_HU) October 19, 2026
The new government’s plans would reverse this:
- Mothers over 40: The full tax exemption, which has already become law, will be repealed before they even receive it. They will end up having to pay income tax after all.
- Mothers under 40: Their tax exemption will be restricted. If they earn above a certain threshold, they will have to pay income tax on the amount exceeding that threshold.
The FIDESZ politician argues that these restrictions are being imposed at Brussels’ request and that Hungarian families will pay the price.
The European Commission President will deliver a speech in Budapest on October 23. Continue reading
Via Economix; Featured photo: MTI/Hegedüs Róbert
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