A European post-communist trajectory
Since the fall of the Iron Curtain in 1989, Hungary has chosen to open up rapidly to the West. After becoming a parliamentary democracy in 1990, it turned towards European and Atlantic institutions. Its accession to NATO in 1999 strengthened its security in a region that had long been unstable. In 2004, Hungary joined the European Union, giving it access to the single market and substantial structural funds. Since 2007, the Schengen area has abolished external borders, facilitating trade and travel for European citizens. This integration has profoundly transformed the country's economy, infrastructure and institutions, while opening up new horizons for its citizens. The country has undergone rapid modernization, driven by European investment and a favorable business climate. However, this openness has been accompanied by challenges, not least the need to adapt to strict European standards and manage the expectations of a changing society.
Among its multilateral commitments, Hungary plays a key role in the Visegrád Group, created in 1991 with Poland, the Czech Republic and Slovakia. This group aims to coordinate the positions of its members within the European Union, particularly on issues such as migration policy, regional security and economic development. Through this cooperation, Hungary seeks to strengthen its influence while defending common interests with its Central European neighbors.
As far as the adoption of the euro is concerned, while this issue remains high on the public agenda, it is not on the short-term agenda. Internal budgetary tensions, linked to high deficits and rising public debt, as well as political differences with Brussels, are slowing down the prospect of entry into the euro zone. Indeed, Hungary must meet several strict economic and financial convergence criteria before it can adopt the single currency. In addition, the Hungarian government, while valuing the economic advantages of the European Union, wishes to preserve its monetary sovereignty, reflecting a desire to control its economic and budgetary policy autonomously.
Political institutions and electoral system
Hungary is a parliamentary republic with a unicameral system. Its Parliament - the Sejm (Országgyűlés) - has 199 deputies elected for a four-year term under a mixed electoral system: 106 are elected by the first-past-the-post system, favoring the most popular candidates in their constituency, while 93 seats are allocated by proportional representation on national lists, with an electoral threshold of 5% for single parties and 10% for coalitions. This system aims to balance local and proportional representation.
The President of the Republic, elected by the Sejm for a five-year term, plays an essentially symbolic role. Executive power is exercised by the Prime Minister, a post held since 2010 by Viktor Orbán, leader of the conservative Fidesz party. His government has broad prerogatives in defining and implementing public policy.
On the political scene, Fidesz-KDNP has dominated for over a decade. The fragmented opposition includes several parties with different profiles: the center-right Tisza party, which has grown strongly since its creation by Péter Magyar, a former Fidesz executive; the center-left formations Demokratikus Koalíció (DK) and MSZP; the young liberal Momentum party; as well as Jobbik and Párbeszéd, representing respectively the radical right and progressive environmentalist tendencies.
A cautious economic recovery
In 2024, the Hungarian economy timidly returned to modest GDP growth of 0.5%, mainly driven by services (trade, transport, communications), while agriculture, industry and construction continued to hold back the recovery. The economic structure is made up of around 3% for the primary sector (agriculture), 27% for the secondary sector (industry, notably automotive, electronics and chemicals) and almost 70% for the tertiary sector (services). GDP per capita is around €21,510, still below the European average. The public deficit has improved to 4.9% of GDP, while public debt is stable at around 73.5%, incorporating the Hungarian state's purchase of Budapest airport, a strategic investment aimed at strengthening national sovereignty over a key asset and supporting the development of transport infrastructure, which should boost economic growth in the medium term. After record inflation in 2023, at 17.6%, inflation slowed sharply to 3.7% in 2024. Unemployment remains low at 4.4%, but the labor market is showing signs of slowing down, with job vacancies falling and wage moderation likely in 2025. Despite these fragilities, Hungary continues to attract foreign investment in key sectors such as green technologies, electronics and the automotive industry, which are essential to its future development.
Booming tourism
Today, tourism is a key sector of the Hungarian economy, showing remarkable growth in 2024. With more than 18 million visitors, up 11% on 2023, Hungary set an all-time visitor record. These visitors generated over 44 million overnight stays, split almost equally between international tourists and local travelers. Among foreign visitors, Germans, Austrians, Czechs, Poles and Britons were the most numerous.
Budapest remains the main tourist gateway, seducing visitors with its architectural wealth, its emblematic bridges over the Danube, its impressive parliament, its varied museums, and above all its famous thermal baths, such as Széchenyi and Gellért. But other destinations are also gaining in popularity: Lake Balaton, nicknamed the "Hungarian Sea", spa towns such as Hévíz, Baroque villages and the renowned Tokaj and Eger wine regions. Pécs, in the south, also attracts visitors with its rich heritage of Ottoman, Roman and medieval influences.
Tourism accounts for some 6-9% of Hungary's GDP and supports almost 10% of direct and indirect employment. This performance can also be attributed to good accessibility, thanks to low-cost flights, rail links with neighboring countries, and Hungary's participation in the Schengen area, which facilitates borderless travel. What's more, despite the inflationary pressures of the 2020s, the tourism sector still offers competitive rates.
Thanks to this dynamic, the tourism sector is a major lever for Hungary's economic growth, and an essential asset for the country's attractiveness by 2030.
The challenges ahead
Hungary remains one of the European Union's most closely watched countries in terms of the rule of law. Since 2010, under the leadership of Viktor Orbán, the government has been carrying out controversial reforms, often accused of restricting fundamental freedoms. In 2024, several measures drew strong criticism both at home and abroad: the banning of Budapest Pride, the adoption of a law limiting foreign funding of the media and NGOs, and the symbolic decision to withdraw from the International Criminal Court. These decisions heightened tensions with European institutions, leading to the freezing of several billion euros in European funds. This freeze is holding back public investment, particularly in rural and less-developed areas. At the same time, a more visible political opposition is beginning to emerge in the run-up to the 2026 parliamentary elections. However, the Fidesz party retains a strong hold on institutions and the media, making political alternation unlikely in the short term.
Beyond the political stakes, Hungary faces major structural challenges. The country is experiencing a rapidly ageing population, accompanied by a low birth rate, while many young graduates are choosing to emigrate to Germany, Austria or the Nordic countries, attracted by better professional opportunities. Moreover, the slow absorption of European funds, a direct consequence of political tensions, deprives the country of a major lever for modernizing its public services, schools, hospitals and rural infrastructures. Without a peaceful dialogue with Brussels, economic and social development could be slowed down in the medium term. Another major point of attention concerns press freedom. Since 2010, the government has centralized a large part of the media under the KESMA foundation, which controls over 400 pro-power titles. While a few independent media outlets remain, they operate in a hostile environment marked by financial pressures, administrative hindrances and smear campaigns. In 2025, Hungary ranked 68th out of 180 countries in the Reporters Without Borders world index, reflecting a decline in media pluralism and a climate increasingly unfavorable to free and independent information.
