Part I — Situation overview

On the morning of 28 October 2026, the Ministry of Finance published its medium-term economic-policy and budgetary programme for 2027–2030. According to the 35-page document, the Government would push the general government deficit below 5 per cent in the 2027 budget, and below 3 per cent by 2030, which is one of the conditions for introducing the euro. State secretary Gyula Barabás spoke to Portfolio of a reduction from the expected 7.5 per cent this year to 4.9 per cent. Growth of gross domestic product (GDP) would accelerate from 1.7 per cent this year to 3.1 per cent by 2030, while inflation would rise to 3 per cent next year and then ease to 2.5 per cent. According to Portfolio, the figures for 2026–2028 are forecasts, while those for 2029–2030 are already target-path values, and public debt, at the 74.9 per cent indicated for 2030, would remain above last year’s 74.4 per cent. The programme builds growth on investment (expansion of around 6 per cent a year) and on productivity: the growth contribution of productivity would have to rise from around 0.5 per cent a year to 1.5 per cent. According to Portfolio’s analysis, wage dynamics would roughly halve.

The antecedent is the package submitted on Tuesday evening. The Government — submitted by Deputy Prime Minister Bálint Ruff — put before Parliament a 15 per cent corporate tax for large companies, a banded advertising tax, a pension minimum of HUF 120,000 and a six-month postponement of the excise duty increase on premium fuels. MIAK has already made detailed proposals on these in its analyses of 28 October 2026 and 19 October. MIAK had earlier called for the medium-term programme on several points: on 13 September it asked for a productivity target indicator, and on 14 October for a credibility summary. The productivity target has now appeared in the document, and the larger part of the deficit reduction — according to the programme’s own text as well — falls in 2027.

MIAK’s reading: the programme is more cautious and more quantified than earlier government visions, and according to 444.hu it remains below market expectations until 2028. Its credibility, however, will be decided on three open points. In Gyula Barabás’s words, the document is formally not part of the budget law, and the medium-term plan for the European Commission is still under negotiation. There is no dated timetable for the conditions of the exchange-rate mechanism (ERM II), which counts as the euro’s waiting room. And the growth path rests on a productivity turnaround for which there is no designated yardstick accounted for annually.

Part II — Grounding in the literature

According to the International Monetary Fund (IMF) World Economic Outlook 2025 report, the key to credibility is a public medium-term fiscal framework with a clear target value, a preannounced adjustment path and a contingency plan for shocks. The authors specifically warn that a strategy built on a favourable baseline or exceptional growth is itself a source of vulnerability. Article 140 of the Treaty on the Functioning of the European Union (TFEU) and the Protocol on the convergence criteria lay down that introducing the euro requires participation in the exchange-rate mechanism without tensions for at least two years before the examination. The 2030 target date therefore in fact means a 2028 entry deadline. The European Commission’s 2025 Euro Area Report shows, on the Baltic and Slovak experience, that wage increases faster than productivity worsen competitiveness through unit labour cost — the slowing of wage dynamics in the Hungarian programme is the reverse of the same. American investor Ray Dalio’s book Principles links credibility to keeping a record of past performance: weight is carried by the opinion of someone whose forecasts can be checked after the fact. The detailed discussion of the literature — by author, with quotations — can be found in section 6.4 Literature in detail.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable measures that turn the published medium-term programme from a ministerial analysis into an accountable, shared commitment.

3.1 A parliamentary debate and a Fiscal Council opinion before the Brussels plan (before submission to the Commission, by 31 December 2026 at the latest)

The medium-term programme is a publication of the Ministry of Finance, it is not part of the 2027 budget bill, and the medium-term fiscal-structural plan for the Commission is still under negotiation. This plan will lay down the net expenditure path that will be enforced in the coming years under the EU excessive deficit procedure (EDP — Excessive Deficit Procedure). MIAK proposes that the Government publish the plan in Hungarian before submitting it to the Commission and submit it to Parliament for information, and that the Fiscal Council give a public opinion on it. Parliament could discuss the plan in a political debate, in the form of a draft resolution. The path would thus not be the oral commitment of a single government term, but a documented framework also debated by the parliamentary opposition. Each of the Government’s annual EU progress reports should likewise be put before the public at the same time. The proposal links the G23 debt-sustainability framework with the G1 data-driven budget. Of the credibility elements described by the IMF (see 6.4.1), the public, preannounced path would thus exist not only towards the Commission but also towards voters.

3.2 An ERM II prerequisites timetable as a joint publication of the Government and the MNB (by 30 June 2027)

According to Gyula Barabás, the Ministry of Finance and the Magyar Nemzeti Bank (MNB) are starting preparations for negotiations on entry into the exchange-rate mechanism (ERM II), and consultations related to the banking union and the single supervisory and resolution mechanism are also on the agenda. Since the TFEU requires at least two years of participation without tensions (see 6.4.2), entry must take place by mid-2028 at the latest for the 2030 target date. MIAK proposes that the Government and the MNB — respecting central bank independence, as an agreed joint document — publish a prerequisites timetable by 30 June 2027. It should set out which commitments must be fulfilled before entry (close cooperation with the European Central Bank’s banking supervision, anti-money-laundering regulation, governance of state-owned enterprises, insolvency framework), who is responsible for them, and by when. This is not the same as MIAK’s annual euro-readiness statement of July 2026: that one tracks the macroeconomic criteria, while this one schedules the institutional conditions of entry. The proposal extends the KP3 principle of transparent foreign policy to EU negotiations as well.

3.3 A source-by-source breakdown of the productivity assumption and its annual independent reckoning (first edition by 30 April 2027)

The programme only achieves growth above 3 per cent if the contribution of productivity triples. The Ministry of Finance expects this from restoring competition, from “dismantling the NER”, from the ramp-up of investment and from EU funds. MIAK proposes that the next update of the programme break down the assumption by source (competition effect, investment, EU funds, flow of labour to more productive firms), and assign an annual, measurable interim target to each source. The reckoning should be done not by the ministry preparing the plan, but by an independent institution — analysts of the MNB or the Fiscal Council, or a university research unit — with a public explanation of the deviation between plan and outcome. This applies the forecast-record principle of the G19 radical transparency programme point (see 6.4.4) and the logic of the G24 institutional quality index to the medium-term path. Since slowing wage dynamics will not lastingly worsen the situation of households only if productivity really accelerates (see 6.4.3), the reckoning could also be the shared data basis for wage agreements — the FO10 wage-negotiation forum.

The three proposals are linked by one principle: a medium-term path is credible if it is guaranteed not by the text of the document, but by the procedure assigned to it. The framework described by the IMF — a public target value, a preannounced path, a contingency plan — only works if Parliament knows it, the timetable is dated, and someone checks the riskiest assumption every year.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Economy A more predictable path, a lower risk premium (spread) — according to Gyula Barabás, a significant part of yield convergence may come with ERM II If the productivity turnaround fails to materialise, the 2029–2030 target path can only be held with further adjustment
Society The reasons for and conditions of slower wage growth are public, and wage bargaining can rest on shared data The halving of wage dynamics, as an election year approaches, creates political pressure to abandon the path
Public administration The parliamentary debate and the independent reckoning improve the quality of planning Extra work at the Ministry of Finance and the Fiscal Council; the debate may slow the negotiations with Brussels
External relations A dated ERM II timetable strengthens the negotiating position A public slippage of the timetable is in itself a loss of credibility

The main dilemma lies between publicity and flexibility. A dated ERM II timetable and an annually reckoned productivity assumption make every slippage visible — this is uncomfortable for the Government, but this is precisely what gives it its value. According to the market criticism quoted by Portfolio, the main question is the plausibility of the deficit reduction planned for the 2030 election year, and only steps fixed in advance and verifiable can strengthen it. The proposal may tip into risk if the parliamentary debate turns into a political renegotiation of the path; this is why MIAK proposes submission for information and a draft resolution, not enshrining the plan in law.

Part V — Measurability and summary

5.1 What is worth tracking? (proposed KPIs)

MIAK proposes tracking the following key performance indicators (KPIs):

  • Parliamentary discussion: the fiscal-structural plan is put before Parliament before submission to the Commission, and the Fiscal Council’s opinion is public (yes/no, by 31 December 2026).
  • ERM II timetable: the joint prerequisites timetable of the Government and the MNB appears by 30 June 2027; by mid-2028 ERM II entry takes place or the slippage is justified.
  • Productivity reckoning: the first independent reckoning appears by 30 April 2027; the 2027 productivity contribution is close to the interim target set by the programme, and the deviation is explained source by source.
  • Keeping to the path: the actual 2027 deficit does not exceed 4.9 per cent, and the 2028 budget carries forward the 2029–2030 target-path values unchanged or with justified modification.

5.2 Summary

The medium-term programme is more cautious and better quantified than earlier practice: it places the bulk of the deficit reduction at the beginning of the period and — in line with MIAK’s September request — also names a productivity target. MIAK now asks that the plan receive procedural guarantees on three points: Parliament should debate the Brussels version, the institutional steps leading to the euro’s waiting room should get dates, and the riskiest assumption should be accounted for annually by an independent institution.

The MIAK foundational value involved is primarily accountability: a four-year path can only be held to account if voters and Parliament see both the plan and its fulfilment. Alongside it is data-drivenness: the productivity turnaround is today an expectation, and only annual measurement turns it into a proven fact — or signals in time that correction is needed.

Part VI — Reasoning and further sources

6.1 Press framing by spectrum

In the liberal-left band, Telex highlighted the programme’s structural diagnosis: running the state is more expensive than the regional average, and state intervention in the economy is larger as a share of GDP, so the deficit reduction focuses on “wasteful and overpriced” operating expenditure. In an evaluative tone, 444.hu compared the document with earlier government visions, and wrote of a forecast “standing on the ground of realities”, with the metaphor of the euro’s “waiting room”. HVG focused on the details of the corporate tax for large companies (from 9 to 15 per cent, affecting 123 companies according to HVG’s 2025 ranking), not on the medium-term path.

In the public-affairs band, 24.hu covered the banded structure of the advertising tax and the concerns of the Hungarian Advertising Association — close to 40 per cent of domestic advertising spending goes to global platforms — as well as the teachers’ union’s dissatisfaction with the size of the pay rise. Index discussed the practical details of the wealth tax return. In the economic band, Portfolio provided the most material: Gyula Barabás’s interview on ERM II preparation, the Ministry of Finance’s analysis of international adjustment episodes, and an article on the slowdown of wage dynamics framed as a “cold shower”. In the conservative band, Magyar Nemzet criticised the phasing out of the margin cap and the increase in the special retail tax, and did not discuss the medium-term path separately.

6.2 Facts and data

Indicator Value Source
General government deficit, 2026 (expected) → 2027 (target) 7.5% → 4.9% of GDP Gyula Barabás, Portfolio, 28 October 2026
Deficit target 2030 below 3% MoF medium-term programme (Telex, Portfolio)
GDP growth 2026 → 2030 1.7% → 3.1% MoF medium-term programme (Telex)
Inflation 2026 → 2027 → 2030 1.7% → 3% → 2.5% MoF medium-term programme (Telex)
MNB September forecast: GDP 2027 / 2028 2.9% / 2.8% Telex, 28 October 2026
MNB September forecast: inflation 2027 / 2028 3.1% / 2.6% Telex, 28 October 2026
Public debt 2025 → 2030 74.4% → 74.9% of GDP Portfolio, 28 October 2026
Interest expenditure 2030 3.3% of GDP Gyula Barabás, Portfolio
Growth contribution of productivity ~0.5% → 1.5% a year Gyula Barabás, Portfolio
Expansion of investment ~6% a year Gyula Barabás, Portfolio
Savings from eliminating overpricing HUF 700 bn (2026) + HUF 1,465 bn (2027) Gyula Barabás, Portfolio
Large adjustment episodes (primary balance improvement of ≥4.5 percentage points over 3 years) ~60% of them took place with average growth of ≥3% MoF analysis, Portfolio, 28 October 2026

The Ministry of Finance’s own episode analysis also states the main condition of the path: successful adjustments relied on operating expenditure, spared investment — and were typically accompanied by growth above 3 per cent. The programme assumes lower growth than this until 2028, which means that the adjustment of the first years starts in a less favourable environment than most of the successful cases analysed.

6.3 Policy dimensions

  • Economy (programme points) — debt-sustainability framework (G23), data-driven budget (G1), record-keeping of forecasts (G19) and the institutional conditions of productivity (G24);
  • Foreign policy (programme points) — transparency of the ERM II negotiations and the banking-union consultations (KP3);
  • Employment policy (programme points) — slowing wage dynamics and a shared data basis for wage bargaining (FO10), encouraging workplace productivity (FO9);
  • Social policy (programme points) — the increase of the pension minimum within the medium-term path (SZ13);
  • Culture (programme points) — the media-market effect of the advertising tax (KU2).

6.4 Literature in detail

6.4.1 IMF: World Economic Outlook 2025

Alongside the narrowing of fiscal space, the IMF’s 2025 report also names the conditions of credibility. According to the authors, credible medium-term consolidation must aim at rebuilding buffers while protecting support for vulnerable groups; and the main instrument of sustainability is a public framework:

“Governments should publish medium-term fiscal frameworks with clear anchors, preannounced adjustment paths, and contingency plans to manage shocks.”

In the same place, the report warns that fiscal strategies relying on a favourable baseline or exceptional growth themselves count as a source of vulnerability. For the Hungarian programme this means two things: publication is in itself a good step, but the 2029–2030 target-path years rest precisely on accelerating growth and the productivity turnaround — this is why the parliamentary debate (3.1) and the annual reckoning (3.3) are needed.

📖 Source: IMF: World Economic Outlook 2025

6.4.2 European Union: Treaty on the Functioning of the European Union

Article 140 of the TFEU names four convergence criteria: price stability, a government budgetary position without an excessive deficit, observance of the normal fluctuation margins of the exchange-rate mechanism, and convergence of long-term interest rates. According to the Protocol on the convergence criteria, the exchange-rate criterion means that the member state has kept to the normal fluctuation margins without severe tensions for at least the two years before the examination, and has not devalued its currency against the euro on its own initiative. Within this framework, the Hungarian 2030 target date means that the latest possible date for ERM II entry is 2028 — this gives the timing of proposal 3.2.

📖 Source: Treaty on the Functioning of the European Union (consolidated version), Article 140 and the Protocol on the convergence criteria

6.4.3 European Commission: 2025 Euro Area Report

The Commission’s report analyses the wage and cost dynamics of the euro area. According to the authors, strong wage increases not accompanied by productivity improvement significantly raised unit labour cost in 2023, most of all in the Baltic states and Slovakia; for the following years, they expected the slowdown of unit labour cost from moderating wage growth and improving productivity. The Hungarian programme chooses the preventive version of this mechanism: it keeps inflation in check before euro adoption by moderating wage dynamics. This is socially sustainable if productivity really accelerates — otherwise the slowing wage is not a competitiveness gain but a loss in living standards. This is why proposal 3.3 links the productivity reckoning to wage bargaining.

📖 Source: European Commission: 2025 Euro Area Report (Institutional Paper 304)

6.4.4 Ray Dalio: Principles

Ray Dalio (American investor, founder of Bridgewater Associates) links the credibility of decision-making to the verifiability of past performance. By his definition, believability is the likelihood that someone’s opinion will prove correct, and this — even if it cannot be measured precisely — can be estimated from the quality of the reasoning and from the record of past results. MIAK’s programme point G19 transposes this principle into economic policy. Applied to the medium-term programme, the credibility of the productivity assumption depends not on the ministry’s intentions, but on whether the planned and the actual value can be publicly compared year after year.

📖 Source: Ray Dalio: Principles

6.5 International comparison

ERM II prerequisites. Bulgaria and Croatia joined ERM II in July 2020 after fulfilling prior commitments: both countries established close cooperation with the European Central Bank’s banking supervision, and made commitments in areas including anti-money-laundering regulation, governance of state-owned enterprises and the insolvency framework. Croatia introduced the euro in 2023, Bulgaria in 2026. Experience shows that the institutional steps before entry can take years, which is why the timetable must be put together now.

Ex-post evaluation of forecasts. The UK’s Office for Budget Responsibility publishes an annual forecast evaluation report, in which it compares its earlier forecasts with actual data and explains the deviations by cause. This practice is the model for the productivity reckoning in proposal 3.3: credibility is built not by the fact of an error, but by a public breakdown of the sources of the error.

National ownership. The 2024 reform of EU economic governance rests on national medium-term fiscal-structural plans, explicitly with the aim of strengthening national ownership. A plan known only to the executive serves this aim only in part — this is the starting point of proposal 3.1.

Economy

  • G23 — Public-debt sustainability framework
  • G1 — Data-driven budget
  • G19 — Radical transparency in economic decision-making
  • G24 — Institutional quality index — a basic condition of growth

Foreign policy

  • KP3 — Transparent foreign policy

Employment policy

  • FO10 — Wage-bargaining modernisation — tripartite wage forum
  • FO9 — Productivity movement — workplace innovation incentives

Social policy

  • SZ13 — Pension adequacy and sustainability

Culture

  • KU2 — Media pluralism monitoring

Proposed new programme point: ERM II prerequisites timetable and institutional roadmap for euro adoption — for the Economy area.

6.7 List of sources

Press sources (MIAK press monitor, 29 October 2026 — topic 1):

Knowledge-base references (literature):

  • 📖 IMF: World Economic Outlook 2025
  • 📖 Treaty on the Functioning of the European Union (consolidated version)
  • 📖 European Commission: 2025 Euro Area Report (Institutional Paper 304)
  • 📖 Ray Dalio: Principles

MIAK internal materials:

  • MIAK policy area: Economy (programme points; programme point ID: G23, G1, G19, G24)
  • MIAK policy area: Foreign policy (programme points; programme point ID: KP3)
  • MIAK policy area: Employment policy (programme points; programme point ID: FO10, FO9)
  • MIAK policy area: Social policy (programme points; programme point ID: SZ13)
  • MIAK policy area: Culture (programme points; programme point ID: KU2)
  • MIAK press monitor, 29 October 2026 — topic 1, score: 97/100

Supplementary public data sources:

  • Ministry of Finance: medium-term economic-policy and budgetary programme for 2027–2030 (28 October 2026) — based on press reports
  • Office for Budget Responsibility: Forecast evaluation report (annual publication)

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