PM Orban: "Minimum Wage to Near Half the Average Salary in Historic Agreement" + Video

The government signed a three-year wage agreement with representatives of employers and employees.

Prime Minister Viktor Orban signs the three-year wage agreement (Photo: MTI/Zoltan Mathe)

Peace is also an economic interest

– The economy has two key players. They both have their own representatives, and it is best if the government’s role in wage agreements is minimized,” PM Orban stated, after the signing of the three-year deal on wages. However, he acknowledged that government intervention becomes necessary when the parties’ positions are far apart. “We aim to maintain the principle that wage agreements are reached by those who operate the economy,” he added.

Mr. Orban signaled that the war is severely affecting all sectors of the European economy, leading to high inflation and low growth. He emphasized that peace would open broader opportunities for Hungary’s economy, which is why the government decided to wait for the outcome of the U.S. presidential election, before finalizing this agreement.

This wage agreement is based on the premise that we'll manage to make 2025 a year of peace, allowing us to envision an economic development trajectory expected in a peaceful year,” Mr. Orban said. He called the government's projection that economic growth will exceed 3% next year a realistic target.

Historic wage agreement

PM Orban congratulated the participants, pointing out that reaching a deal required state leadership skills.  – We can only advance individual interests if we avoid causing harm in the process. National commitment - to the agreement as a whole, and to each other - is essential, he stressed. He underscored the importance of reaching an agreement that is rooted in national consciousness, considering others' benefits as well, rather than self-interest alone.

There is nothing left but to adhere to the terms of the agreement, which will not be simple. The wage hikes  - 9%, 13%, and 14% - must be supported by improvements in efficiency and productivity, as these are essential for funding the envisioned raises,

– PM Orban said, calling the agreement historic on an international scale. The current 43% increase in the minimum wage is truly unprecedented, and we've only seen one such example in the past 30 years at the EU level, he stated.

According to the expectations, the real value of the minimum wage will rise by 29%, 

bringing it close to reaching half of the average salary.

Mr. Orban also mentioned that they anticipate numerous investments in 2025, totaling 8.1 trillion forints, with 450 billion forints expected to flow into the economy that year.

Average salary to reach one million forints

The prime minister recalled that they could not have reached this agreement without initiatives like the Demjan Sandor program, a 1,410-billion forint (or 3,43bn-euro) scheme designed to support small and medium-sized businesses. He also credited the workers' loan program and a 150,000-forint housing subsidy for young people as key factors. – This wage agreement will work if the new economic policy succeeds, Mr. Orban highlighted.

He recalled the government’s 2010 pledge to create one million new jobs.  – There was skepticism, but the facts show that it was not impossible, partly because of the agreements concluded between the trade unions and the employers.

What we're saying is that we must achieve an average salary of 1 million forints within the foreseeable future,

– PM Orban stated. There are lingering doubts and uncertainties, he said, but he called the partnership reflected in this agreement a promising sign. “I believe Hungary can achieve this,” he declared. 

Details on the increase of the lowest mandatory wage (minimum wage) and the guaranteed minimum salary:

1. The agreement, signed by members of the Competitive Sector and the Government's Permanent Consultation Forum (VKF), aims to increase the purchasing power of incomes over the next three years, ensuring that a broader segment of society should benefit from economic growth.

The monthy gross amount of the lowest mandatory wage (minimum wage): 

• From January 1, 2025 a 9% increase will bring the gross minimum wage to 290,800 forints.
• From January 1, 2026 a 13% increase will raise it to 328,600 forints.
• From January 1, 2027 a 14%, increase will take it to 374,600 forints.

9. The members of VKF determined the rate of minimum wage hikes for the upcoming years based on the projections of the following macroeconomic indicators:

• Gross average wage: 8.7% (2025), 7.6% (2026), 7.4% (2027)
• GDP: 3.4% (2025), 4.1% (2026), 4.3% (2027)
• Inflation: 3.2% (2025), 3.0% (2026), 3.0% (2027)

"We need a completely new economic policy for when the war's over," PM Orban told public radio in his Friday interview. He pointed out that the government's new economic policy aims to raise growth above the European average. It is based on economic neutrality.

The economic action plan also includes a wage strategy, in addition to focusing on housing and assistance for small businesses.

When prices are high, one of the ways to defend against this is through wage hikes, according to PM Orban. If an agreement is not reached, the government must step in to provide assistance. This has been done, and a three-year wage increase is coming, he emphasized. 

– In the next three years, the minimum wage will increase by 9%, 13%, and 14%, while the guaranteed wage minimum will rise by 7% next year, so despite the expected inflation of 3–4%, wage growth will be dynamic," Czomba Sandor, the state secretary for employment policy, told Hungary's public Kossuth Radio on Sunday morning. 

The goal is for the minimum wage in Hungary to reach around 400,000 forints by 2028.

Currently, around 211,000 people earn the minimum wage, and approximately 330,000–340,000 people earn the guaranteed wage minimum. In total, about one million people will be directly affected by the minimum wage increase, out of Hungary’s 4.7 million-strong workforce.

It's a realistic goal that, within a few years, the minimum wage will reach 400,000 forints, and the average wage will be one million forints in Hungary,

– said Tamas Menczer , the communications director of the Fidesz-Christain Democrat (KDNP) party alliance, over the weekend.

Cover photo: Prime Minister Viktor Orban signs the three-year wage agreement (Photo: MTI/Zoltan Mathe)