Hungary Aims for 2032 Euro Adoption with New Roadmap

Hungary has a potential timeline for adopting the euro, according to Zoltán Kurali, Deputy Governor of the Hungarian National Bank (MNB). Speaking at Portfolio’s Back to Europe conference, Kurali outlined a roadmap where Hungary could join the ERM II exchange-rate mechanism in 2029, with a final decision on euro adoption expected in 2031. The process could begin as early as this autumn, pending the government’s presentation of a credible medium-term macroeconomic plan.

Key milestones include legal harmonisation starting in 2027 and a 2028 convergence report to assess Hungary’s compliance with inflation, public finance, and debt targets. ERM II membership typically lasts at least two years before euro adoption, though some countries stay longer. The MNB’s recent decision to lower its inflation target from 3% to 2.5%, effective from 2028, could help meet the euro adoption criteria, which could officially take effect on 1 January 2032.

Kurali noted potential benefits, such as reduced government bond yields as investor confidence grows. However, adopting the euro also involves trade-offs, including losing some monetary policy independence and potential competitiveness issues if the conversion rate is poorly chosen. Economists caution against rushing, suggesting a slower convergence path could allow for more structural reforms and investment.

For now, 2032 remains a potential target rather than a guaranteed date for Hungary to adopt the euro, depending on the country’s ability to meet all necessary conditions.