Hungary Targets 2032 Euro Entry With Front-Loaded Deficit Cuts, Finance Minister Says

Hungary's government aims to cut its budget deficit to 4.9% of GDP in 2027 from an expected 7.5% this year, a front-loaded adjustment Finance Minister Andras Karman says will put the country on course to adopt the euro, possibly by 2032, he told Reuters. Karman said the measures target a deficit below 3% of output by 2030, a condition for euro entry, prioritizing sustainable reduction over short-term cuts. The budget, the first under Prime Minister Peter Magyar, trims policies inherited from former leader Viktor Orban deemed unsustainable, including capping a mothers' income tax exemption and halting the phase-in of an extra month of pensions. The cost of capping retail energy prices will rise by 232 billion forints ($716 million) next year, exceeding the 200 billion forints Magyar aims to raise from a new wealth tax. Karman said Hungary will not rush entry into ERM-2, the euro's waiting room, warning that fixing the exchange-rate midpoint too soon would not be ideal.