New Wage Deal Paves Way for Growth and Record Investments

Hungary has set ambitious goals for 2025, aiming for over 3% economic growth and a historic wage increase under a newly signed three-year agreement. As part of its broader economic strategy, the government plans extensive public investments while emphasizing collaboration among workers, employers, and the state.

At the signing ceremony, Prime Minister Viktor Orbán called the agreement “historic,” targeting a 40% minimum wage increase by 2027. The real value of wages is expected to rise by 29%, reaching 50% of the average wage. He highlighted the economic optimism underpinning the plan, stating,

we have to be at the top of the chasing pack with a chance of catching up with the best.”

However, he acknowledged challenges, particularly the European economy’s struggles due to ongoing geopolitical instability.

Public investments are central to Hungary’s strategy. The Prime Minister announced a “public investment boom” in 2025, with 300 projects worth HUF 8100B (EUR 20.7B). Major developments include the Budapest-Belgrade railway and large factories in Győr (western Hungary), Szeged (southern Hungary), and Debrecen (southeastern Hungary). Of the planned investments, HUF 450B (EUR 1.15B) will boost the economy in 2025, creating growth opportunities for SMEs (small & medium-sized enterprises) and workers. Programs like the Sándor Demján initiative, providing HUF 1410B (EUR 3.6B) for SMEs, and youth housing subsidies were also emphasized.

László Perlusz, Secretary-General of VOSZ (National Association of Entrepreneurs and Employers), stressed the importance of improving productivity to meet these ambitious goals. He called for businesses to adopt new technologies like AI and digitalization, noting,

employers need to be more competitive and productive.”

Workers are also expected to embrace training and innovation, while the government supports these efforts through programs like the Széchenyi Card (state supported benefit/incentives card for employees).

Flexibility is key to the agreement’s success. Union leader Melinda Mészáros highlighted the review clause, allowing for renegotiation if economic conditions change. She praised Hungary as one of six EU countries to transpose the minimum wage directive on time, describing the deal as a vital step toward improving workers’ livelihoods.

The agreement reflects Hungary’s broader economic vision, echoing Viktor Orbán’s 2010 job creation pledge.

In 2010, we pledged to create one million new jobs, and we achieved it,” he said.

Now, the government aims to raise the average income to HUF 1M (EUR 2,560), a goal Mr. Orbán acknowledged is “surrounded by doubts and controversy” but achievable with collaboration among all stakeholders.

The new wage agreement sets a progressive path toward economic growth and higher wages, backed by public investments and cooperative efforts among unions, employers, and the government. This balanced approach underscores the country’s commitment to improving its economic standing and citizens’ livelihoods.

Via MTI; Featured Image: Pixabay