Hungarian Prime Minister Péter Magyar has unveiled the proposed 2027 budget, aiming for a deficit of 4.9% of the country’s gross domestic product (GDP). The budget plan introduces significant tax and spending changes, including increased social benefits and higher public-sector salaries, alongside shifts in income and corporate taxation. Following the announcement, Hungary’s currency, the forint, experienced a strengthening, although it remains uncertain if these gains will persist.
The proposed budget seeks to double family allowances and increase the minimum monthly pension from 28,500 forints to 120,000 forints. Additionally, the 13th-month pension and a portion of the 14th-month pension would be maintained. A total of 677 billion forints is allocated for salary hikes benefiting over 600,000 public-sector employees, while 510 billion forints are designated for healthcare improvements. Municipal budgets are set to receive an additional 64 billion forints, and 100 billion forints are earmarked for road maintenance and pothole repairs. The budget also proposes reducing the solidarity contribution by 62 billion forints.
Tax measures in the budget include a reduction in the personal income tax rate from 15% to 9% for earnings up to the minimum wage, effective from January 1. However, proposed changes to tax exemptions for mothers could introduce an income ceiling of one million forints per month and exclude certain mothers over 40 with two children from receiving these benefits.
To support the budget, the government anticipates saving 1,500 billion forints, collecting 200 billion forints through a wealth tax, and raising the corporate tax rate from 9% to 11% for companies with annual revenue exceeding 180 billion forints. Additional savings of 246 billion forints are expected from concession fees.
The budget proposal has faced criticism, notably from Fidesz politician Balázs Orbán, who argues that the new restrictions could undermine existing family tax benefits. According to Orbán, the changes may result in mothers over 40 with two children losing the planned full income tax exemption, while younger mothers earning above the specified threshold could face taxation on income exceeding that limit. Orbán also suggested that these restrictions are being implemented at the behest of Brussels.