Let the spending begin: Hungarian government unveils 8 new programmes for 2026 ahead of election

Hungarian government economic programs election distribution
Illustration. Photo: depositphotos.com

From January 2026, the Hungarian government is set to roll out eight new economic initiatives totalling nearly HUF 1 trillion (approximately EUR 2.5 billion), aimed at supporting families, public sector employees, and local authorities. The objective is to counteract sluggish economic growth through measures designed to boost consumer spending.

Tax breaks, pay rises, and new subsidy schemes

In line with the government’s latest decision, sweeping tax relief measures and significant salary increases are due to take effect in 2026. According to Index, tax reductions alone could enhance household incomes by HUF 925 billion, with further measures specifically targeting state sector workers.

The eight principal new initiatives include:

  • Doubling the Family Tax Allowance – Monthly tax relief could amount to 66,000 forints per child. (Estimated budgetary impact: HUF 290 billion)
  • Income Tax Exemption for Mothers Under 30 with One Child – A new eligibility category is introduced. (HUF 40 billion)
  • Income Tax Exemption for Mothers Under 40 with Two Children – An additional targeted benefit. (HUF 120 billion)
  • Minimum Wage Increase – From 2026, the minimum wage will rise to HUF 328,600, representing a 13% uplift.
  • 30% Salary Boost for Employees in Smaller Municipalities – Primarily benefits administrative staff in towns with fewer than 30,000 residents.
  • Teacher Pay Increases – A performance-based pay structure will be introduced in September, offering a monthly bonus of HUF 20,000–60,000 per teacher. (HUF 156 billion)
  • 12% Pay Rise for Water Management Employees
  • Salary Increases for Judicial Staff – Judges, prosecutors, and other court personnel are also in line for pay rises.

Home start scheme set to launch

budapest buda castle building flat property colors kató alpár Daily News Hungaryh home loan scheme flat rent
Photo: Alpár Kató / Daily News Hungary

Also included in the economic package is the Home Start Scheme, launching on 1st September. This initiative aims to alleviate housing costs for state employees and is projected to carry a budgetary impact of up to HUF 100 billion by 2026.

Generous support amidst tepid growth

These generous measures come at a time when the Hungarian government has once again revised its economic forecast downward, now anticipating just only 1% GDP growth for 2025. This marks the second major revision this year, following a spring estimate of 2.5%.

Nevertheless, the government remains confident that its budget deficit target of 4.1% remains within reach, and insists that the support measures will yield long-term economic benefits. However, a number of economists remain sceptical, questioning whether such a level of spending is sustainable in the context of continued economic weakness.

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