EUR 1,000 minimum wage by 2028 is a realistic goal for Hungary
These topics will also be discussed at Portfolio's flagship economic summit, for which you can register here.
It is realistic that Hungary's minimum wage will be EUR 1,000 by 2028
A 1,000 euro minimum wage in 2028 is realistic, Gergely Gulyás said in response to a question. Earlier, Márton Nagy also spoke about this amount.
Economy Minister Márton Nagy recently said that the minimum wage in Hungary could rise to €1,000 by 2028. According to the calculations of the Ministry of Finance, the minimum wage will be close to HUF 375,000 in 2027, so it would be enough to raise the minimum wage by 6.6% in 2028 to reach EUR 1,000 at an EUR/HUF exchange rate of 400. Of course, if the forint weakens against the euro by then, a larger increase will be needed to reach €1,000 by early 2028. If we assume that the 12% wage increase rate can continue in that year (which could be the case between 2025 and 2027), Portfolio calculates that the forint could weaken against the euro to almost 420 for the minimum wage to still reach €1,000. Of course, this is only a technical assumption, not a forecast, but merely an illustration of the maximum weakening of the forint to reach the desired wage level calculated in euro if the wage hike dynamics were maintained.
Vote on Schengen accession for Romania and Bulgaria
Hungary supports the accession of Romania and Bulgaria to the Schengen Area. The Hungarian presidency will put the issue to a vote, but on condition that Austria and the Netherlands do not exercise their veto.
Justification for raising the deficit target
The government made a technical decision when it raised the deficit target, as the government does not set the target in terms of the amount, but in terms of the GDP ratio, and the government considers the 4.5% target to be achievable, Gergely Gulyás said in response to the question why the government raised the deficit target by several hundred billion forints this year.
On EUR/HUF north of 400
Does the government have any means to stabilise the forint? According to Gulyás, the exchange rate and the interest rates are a matter for the central bank, and it is clear that there are foreign economic reasons for the weakening of the forint, especially the war in the Middle East. It's not good if the forint exchange rate is too volatile, but the government has no exchange rate target, the minister said.
The government has three main objectives
The government has set itself the goals of
- providing housing,
- raising wages and
- increasing the size of SMEs.
Housing is a particular problem for young people, so dormitories are being built and more accommodation is being provided, but Airbnb rules are also being reviewed.
On wages, the aim is to reach multiannual agreements and to raise both the minimum wage and the average wage.
A programme for SMEs will be developed in a few weeks. This will be part of the budget law, which they plan to present in early November, Gulyás Gergely added.
A cold war in trade is dangerous
The most important topic discussed at the meeting was the issue of boosting Hungary's economic growth, Gergely Gulyás said. The new situation requires new responses in the world economy, he said, referring to Viktor Orbán's earlier words.
The trade cold war is dangerous because it cuts Hungary off from export markets.
The goal is to grow the economy between 3 and 6%. If this is achieved, it will have a positive impact on salaries, among other things.
Cover photo: MTI Photo/Noémi Bruzák
