Recovered EU Funds May Boost Hungary’s Economy by 1%

The Hungarian government has passed more than a hundred new laws to gain access to EU recovery funds that had been withheld as a result of the Orbán government’s policies.

According to the government, all necessary conditions have been met, but these still need to be approved by the European Commission. If this happens, a total of EUR 10 billion in grants and preferential loans could become available to Hungary starting in December this year. Economic experts say the positive effects of this will be felt starting in 2027. An analyst at Erste Bank Hungary believes that EU funds could boost the Hungarian economy’s performance by as much as one percentage point.

The Hungarian economy grew by just 0.5% in 2025, and the European Commission’s spring 2026 forecast projects GDP growth of 1.8% for 2026 and 2.1% for 2027. Second-quarter data so far shows growth of 1.7%. EU funds arriving in the fourth quarter could boost the domestic economy as early as next year. The Hungarian economy would particularly benefit from this in the area of investment.

“The release of the detailed GDP data came as no surprise. The Hungarian economy urgently needs EU funds to support investment. Although at the end of 2025 and the beginning of 2026 it seemed that the gradual upturn might continue and investment could move into positive territory on a year-over-year basis, this hope was dashed by the second-quarter data,” macroeconomic analyst at Erste, János Nagy, said.

He believes that, among the drivers of domestic demand, consumption was the only one the Hungarian economy could count on in the first half of the year.

“For growth to improve and become as sustainable as possible, an improvement in the investment indicator is absolutely necessary. Only in this way can domestic businesses become more profitable, more innovative and competitive,” the Erste macroeconomic analyst explained.

This is the only way wage growth can remain high. A substantial portion of the Recovery and Resilience Facility (RRF) funds could be allocated to support Hungarian small and medium-sized enterprises.

“The funds are expected to arrive around October through December. There is some uncertainty as to whether the full EUR 10 billion euros will necessarily be utilized. New investments will most certainly get underway in early to mid-next year,” János Nagy shared his insights.

There will be no shortage of plans, either from companies or from the government. The use of EU funds will bring a significant inflow of foreign currency. Depending on which use is more urgent, the funds will be converted either on the interbank foreign exchange market or outside of it.

“On an annual basis, the inflow of EU funds could boost the Hungarian economy’s performance by an average of one percentage point,” the macroeconomic analyst said, outlining market expectations.

According to the European Commission’s current forecast, Hungarian inflation could reach 3.2% in 2026 and 3.1% in 2027.

The inflow of EU funds could improve the country’s external financing position and increase foreign exchange inflows. In theory, this could strengthen the Hungarian currency, the forint.