Hungarian Prime Minister Viktor Orbán announced a landmark wage agreement on Monday, poised to bring transformative change to Hungary’s economy and workers over the next three years.
The agreement, achieved through collaboration between employers, employees, and the government, includes phased minimum wage increases of 9 per cent in 2025, 13 per cent in 2026, and 14 per cent in 2027, resulting in a cumulative rise of over 40 per cent. Reflecting optimism for peace and economic recovery, the agreement is set to bolster living standards while fostering national growth.
Facing significant pressures from inflation and the ongoing war in Ukraine, the prime minister emphasized the challenges that shaped the agreement. He noted that these external factors have strained Hungary’s economy but stressed the importance of planning for a peaceful and stable 2025. ‘This wage increase cannot be sustained if we operate as we have in the past,’ PM Orbán stated, highlighting the need for innovation and productivity improvements across all sectors. He also reassured stakeholders that the agreement includes provisions for renegotiation if unforeseen circumstances arise, ensuring flexibility to address future economic challenges.
‘The agreement includes phased minimum wage increases of 9 per cent in 2025, 13 per cent in 2026, and 14 per cent in 2027’
The agreement aligns with European directives that seek for minimum wages to reach 50 per cent of average wages, which PM Orbán described as essential for securing better living standards for workers. To support employers, particularly small and medium-sized enterprises (SMEs), the government will implement targeted measures such as the Demján Sándor Programme, which will provide HUF 1.4 trillion in funding to help businesses adapt and innovate. Additionally, a new Workers’ Loan Programme will assist young employees in achieving financial independence, with a focus on housing support.
PM Orbán linked the wage agreement to Hungary’s broader economic vision, recalling the government’s earlier success in creating one million new jobs within a decade. He expressed confidence in achieving the next major goal: raising Hungary’s average wage to HUF one million. This ambitious target is supported by projections of over 3 per cent GDP growth in 2025 and a substantial public investment boom, including 300 new projects valued at HUF 8.1 trillion. Notable initiatives such as the Budapest–Belgrade railway and major industrial developments in Győr, Szeged, and Debrecen are expected to significantly enhance Hungary’s production capacity.
In his remarks, PM Orbán praised the unity and commitment demonstrated during the negotiations. He stressed that ‘none of us can prosper unless Hungary as a whole prospers,’ noting that the agreement exemplifies the collaborative spirit necessary for national progress.
This historic agreement not only secures substantial improvements for workers but also sets a precedent for cooperation and resilience. By aligning immediate wage growth with long-term economic strategies, Hungary is taking a decisive step toward sustainable development, reflecting its determination to thrive amidst challenges and emerge as a leader in Europe’s recovery efforts.
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