Published: 2023-05-10
Hungary has been contemplating adopting the euro for some time now and it looks like the country may finally meet the Maastricht criteria for this by the end of 2024. In this article, we will explore the key economic indicators that suggest Hungary could finally switch to the euro.
Meeting the Maastricht criteria
According to the head of the Fiscal Council, Árpád Kovács, Hungary's inflation rate is expected to drop from the current 25.4 percent to approximately 3 percent by the summer of 2024. Additionally, public debt relative to GDP is set to fall below 70 percent by the end of next year, while the budget deficit is expected to be around 2.9 percent. These positive projections put Hungary in a good position to meet the Maastricht criteria for euro adoption by the end of 2024.
Projections for GDP growth in Hungary
Kovács added that GDP growth is expected to be at around 1 percent this year. However, the growth rate is projected to rise to 3.5-4 percent by 2024, which further supports Hungary's potential to be ready for the euro by then. In addition to that, Hungary's nominal GDP has been growing since 2020, and the country’s GDP is predicted to reach HUF 78,000 billion (EUR 207.8bn) this year.
Improving inflation rates and GDP per capita
Hungary's inflation rate is set to fall below 10 percent by the end of this year and there are positive forecasts for inflationary trends next year. Also worth mentioning is Hungary’s GDP per capita which already ranks at the top of the bottom third of European Union countries, ahead of Portugal and Slovakia, among others. Kovács predicts that Hungary could move into the midfield by 2029.
Conclusion
The above economic indicators look promising for Hungary's chances at meeting the Maastricht criteria for euro adoption by the end of 2024. This could bring several benefits and opportunities for both the country and its citizens, and we will be keeping a close eye on further developments on the subject.
Questions & Answers
Could Hungary adopt the Euro by 2024? Yes, Hungary may meet the Maastricht criteria for adopting the euro by the end of 2024, according to the head of the Fiscal Council.
What is the Maastricht criteria? The Maastricht criteria are a set of convergence criteria countries must meet before they can adopt the euro. These include inflation rates, public debt, budget deficit, exchange rate stability, and long-term interest rates.
What is the current inflation rate in Hungary? As of February, the inflation rate in Hungary was 25.4 percent.
What is the projected inflation rate in Hungary by 2024? The inflation rate is expected to drop to around 3 percent by summer 2024.
What is the projected GDP growth rate in Hungary by 2024? GDP growth is projected to be around 1 percent this year, before rising to 3.5-4 percent in 2024.
What is the current GDP of Hungary? GDP is set to reach HUF 78,000 billion (EUR 207.8bn) this year.
What is the public debt relative to GDP in Hungary? Public debt relative to GDP will fall well below 70 percent by the end of next year.
What is the budget deficit in Hungary expected to be in 2024? The budget deficit is expected to be around 2.9 percent in 2024.
Where was the head of the Fiscal Council speaking when he made these comments? The head of the Fiscal Council made these comments at the assembly of the Fejer County Chamber of Commerce and Industry in Székesfehérvár, in central Hungary.
How does Hungary's GDP per capita rank compared to other EU countries? Hungary ranks at the top of the bottom third of European Union countries in terms of GDP per capita, ahead of Portugal and Slovakia, among others, and could move into the midfield by 2029.
