Fitch Ratings says Hungary could adopt the euro as early as 2032. The condition is that the country durably reduces its budget deficit and joins the ERM II exchange rate mechanism in 2029, the rating agency said in an analysis published on Tuesday.
Fiscal hurdle stands in the way
Fitch says the biggest challenge is meeting the budget criteria. The European Union is running an excessive deficit procedure against Hungary. Fitch expects the deficit to reach 7.5 percent of GDP in 2026, and its draft budget targets 4.9 percent in 2027.
Government debt is expected to stabilise below 78 percent of GDP in 2026-2027, the agency said. Fitch’s earlier analysis from the previous week had already referred to the 7.5 percent figure.
Inflation and credibility risks
Recent disinflation was partly helped by forint appreciation, which Fitch expects to fade. Wage growth, labour shortages and a high share of regulated prices in the consumer basket are the main risks to price stability.
The current Magyar Nemzeti Bank inflation target is 3 percent. From January 2028 it is set to fall to 2.5 percent.
Also Read
Fitch says euro adoption would improve Hungary’s sovereign credit profile by removing exchange rate risk. A rating upgrade before adoption, however, depends on reducing fiscal vulnerability and strengthening institutional credibility.
Related: Eurasia Group sees Hungary's 2026 deficit at 7.7-7.8% of GDP · Fitch affirms Hungary at BBB with negative outlook
Source: Fitch Ratings
