Fitch sees possible euro entry for Hungary by 2032 if fiscal rules tighten

Fitch Ratings’ latest analysis projects that Hungary could introduce the euro no earlier than 2032 if it fulfills key convergence criteria. The country needs to file a formal intent to join the euro area in 2029 and enter the ERM II exchange-rate mechanism that same year. A durable improvement in the public-finance balance is highlighted as the biggest hurdle, with the agency stressing the need to curb the budget deficit.

Inflation must continue to fall, and the National Bank of Hungary intends to reduce its inflation target from 3 percent to 2.5 percent in early 2028, aligning more closely with the European Central Bank. Fitch also points to the strengthening forint’s limited impact on price stability and warns that fast wage increases, labour shortages and high regulated prices pose ongoing risks. Nonetheless, the switch to the euro would eliminate exchange-rate risk, lower borrowing costs and expand financial flexibility, potentially improving Hungary’s sovereign rating.