Budapest, Hungary – The gross monthly minimum wage in Hungary will increase to 200,000 forints (approximately €564) next year, Prime Minister Viktor Orban announced on Facebook on Wednesday.
This represents a historic 19.5% hike and nearly €100 more than the current level of 167,400 Hungarian forints (€472) for unskilled professions.
Small and medium-sized businesses are expected to receive state support in the form of tax cuts to finance this significant hike.
Last year, the minimum wage was raised by only 4%, and saw an increase of roughly 8% the two previous years. The Hungarian minimum wage is the third lowest in the European Union ahead of Romania and Bulgaria, and the lowest among Visegrad countries.
Compared to €272 when Orban’s Fidesz came to power in 2010, the Hungarian minimum wage increased by 75% in eleven years (not taking into account next year’s hike).
The Hungarian government had previously hinted at the symbolic threshold of 200,000 forints, noting that the negotiations with employers were still underway.
Oppositions parties, who are currently holding their primaries to decide on a common candidate to face off Viktor Orban, have accused the government of introducing long overdue social policy measures to win over voters only months before key elections next spring.
In addition to the minimum wage increase, PM Orban said that a total of €1.7 billion of income tax will be refunded to nearly 2 million parents in early 2022, while the government has also planned for generous home renovation grants to households and extended the moratorium on loan repayments for vulnerable groups until mid-2022.
Pensioners are also set to receive an extra payment next year, the Prime Minister said on Monday at the opening session of Parliament, while the exemption of personal income tax for under-25s is expected to take effect next year as well.
The historic increase is also seen as a response to skyrocketing prices, withthe inflation rate in Hungary hovering around 5% in 2021, one of the highest in Europe.