Hungary could adopt the euro in 2032, according to Finance Minister András Kármán. He outlined that the key prerequisites are the gradual reduction of the budget deficit and stabilizing public finances. The government, led by Prime Minister Péter Magyar, plans to introduce measures in the 2027 budget that would bring the country closer to meeting the requirements for eurozone entry.
However, there is still no binding date for adopting the common European currency. Hungary needs to fulfill a range of economic and monetary criteria and prepare for accession to the Exchange Rate Mechanism II (ERM II).
Government Aims to Reduce Budget Deficit
Speaking to Reuters, Finance Minister András Kármán said the government’s goal is not just a short-term reduction of the deficit. The cabinet aims to set a sustainable course that would bring the budget deficit below three percent of GDP by 2030. According to Kármán, this would create the conditions necessary for euro adoption in 2032.
The Hungarian government is currently preparing its first budget for 2027, which will serve as a vital test of its ability to manage state finances and fulfill commitments regarding prospective entry into the eurozone.
Kármán emphasized that budgetary measures must have long-term effects. He stated that one-off cuts would not be sufficient if public finances again came under pressure in subsequent years.
Deficit Targeted to Drop from 7.5% to 4.9% of GDP
Under current government plans, Hungary’s budget deficit is projected to reach 4.9 percent of GDP in 2027. In 2026, the shortfall is expected to stand at around 7.5 percent of GDP. If these projections are realized, it would represent a significant improvement, though still above the reference limit of three percent, an important eurozone readiness benchmark.
Reducing the deficit will depend on economic developments, government revenues, and the successful implementation of planned measures. Potential risks include volatility in energy and financial markets, which could affect economic growth and state expenses.
The current budgetary road map marks a pathway toward possible euro adoption, not a guarantee that Hungary will introduce the common currency in 2032.
Eurozone Membership Requires Multiple Conditions
Bringing the deficit down is not enough for euro entry. EU member states must meet the so-called Maastricht convergence criteria, which include requirements for price stability, sound public finances, long-term interest rates, and exchange rate stability.
Participation in ERM II is also crucial. This mechanism, often called a “waiting room” for the euro, requires a country to demonstrate currency stability over a period of time and adhere to set rules.
The government plans to form a working group with the central bank in 2027 to prepare a roadmap for entering ERM II and set a realistic timeline. The finance minister stressed that this process should not be rushed without thorough preparation.
What Euro Adoption Could Mean for Hungary
Adopting the euro would replace the Hungarian forint with the European currency. For companies engaged in international trade, this could lower currency exchange costs and reduce some of the exchange rate risks in dealings with eurozone nations.
For citizens, the change would mean that prices and incomes would be denominated in euros. However, simply adopting the currency does not automatically guarantee a higher standard of living or lower prices. The real impact would depend on Hungary’s economic situation, wage developments, pricing policies, and the way the transition to the euro is managed.
This issue is also relevant for Slovakia, which has used the euro since 2009. If Hungary joins the eurozone in the future, it could simplify certain cross-border business and financial operations between the two countries.
2032 Is a Possibility, Not a Set Date
The statement from Hungary’s finance minister offers a more concrete timeline, but the government has not set a fixed date for eurozone entry. Achieving the goal will depend on the results of fiscal consolidation, meeting European criteria, and further decisions regarding monetary policy.
Hungary therefore faces several years of preparation. The 2027 budget is expected to be a first major step, demonstrating that its deficit reduction targets are achievable and sustainable for the long term.
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This article was translated from the original Slovak version with the assistance of AI.
