Part I — Situation overview

In the first week of August 2026 two mutually reinforcing macro figures appeared on a single monitor day. According to the analysis presented on 6 August by the OECD (the economic cooperation organisation of the developed market economies), Hungarian public debt could double by 2045 on the present deficit path, and the organisation is urging structural reforms. On the same day the GKI Economic Research Institute published how the Hungarian price and wage level has developed since 2010 relative to the EU average: the price level has essentially converged, the wage level has not. A few days later, on 7 August, the KSH (Central Statistical Office) reported July inflation of 1.2 per cent — a low not measured for ten years — and on the same day the Hungarian Trade Union Confederation reported that ’the ice has been broken’ in the wage talks held with the ministry responsible for employment policy.

The topic is not without antecedents: on 3 July MIAK already dealt with the budget deficit, at that time with the record deficit announced by the government and with the new fiscal rules. The present analysis deliberately takes a different axis: the focus is not on the inherited, one-off deficit figure but on the long-term debt path (a 2045 horizon) and on the failure of wage convergence — these two figures together, and not the summer deficit announcement, give the real frame of the autumn budget debate. The low inflation figure is in itself favourable news, but it is a base effect: the one-off impact of the earlier price measures (the fuel price cut, the margin cap) and of the strong forint, not a lasting turn — this is also indicated by the fact that the retail trade association immediately urged the phasing out of the margin cap.

In MIAK’s reading the two data series — the debt projection and the price-wage scissors — are in fact two sides of a single problem: both show that Hungarian economic policy has so far been built on case-by-case decisions rather than on numerical paths fixed in advance. Both deficit reduction and wage convergence will be credible only if they become not an annual bargain but an institutionalised, measurable process.

Part II — Foundations in the literature

Before turning to MIAK’s concrete proposals, it is worth setting down the scholarly frame in which the two phenomena — the debt path and the failure of wage convergence — can be interpreted together. Thomas Piketty (French economist, the leading researcher of long-term data on wealth inequality) describes in Capital in the Twenty-First Century the relation r > g: when the return on capital (r) durably exceeds the growth rate of the economy (g), capital income grows faster than wages and output — this gives a theoretical explanation of why the wage level may lag behind the price level even when the market is otherwise ‘working well’. The World Economic Outlook 2025 report of the IMF (International Monetary Fund) publishes concrete, recent debt path projections: for a significant part of the advanced economies substantial adjustment is needed to stabilise debt relative to GDP, and the rise in the interest rate environment in itself pushes up the cost of debt service — this provides the international context for the OECD’s Hungarian warning. Ha-Joon Chang (a Korean-born economist teaching at Cambridge) argues in 23 Things They Don’t Tell You About Capitalism that the wage level is fundamentally shaped by political decisions (immigration rules, interest rate policy, labour law) and not by an abstract ‘free market’ — this gives a direct theoretical basis for building wage convergence on a deliberate institutional framework rather than on a spontaneous process. The detailed treatment of the literature — author by author, with quotations — can be found in section 6.4 Literature in detail.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable measures which together address the debt path and wage convergence.

3.1 A multi-year, numerical deficit and debt path with an expenditure rule (with the 2027 budget)

According to MIAK the real lesson of the OECD warning is not that drastic austerity is needed immediately, but that deficit reduction has so far not been built into a multi-year, numerical framework. The G15 counter-cyclical fiscal stabiliser (a rule under which the state spends more in a downturn and builds reserves in an upswing) and the G21 review of state expenditure together provide this framework: on the expenditure side every larger item is reviewed from a zero base every three years on the principle of organised abandonment, while on the revenue side the path is not an annual political bargain but a benchmark fixed in advance and made public. The question of independent institutional control, which the monitor also raises, is connected to this: according to MIAK the ex post evaluation role of the State Audit Office has to be strengthened for the annual verification of compliance with the deficit path, so that the rule is not merely an announcement but an obligation that can be called to account.

3.2 Institutionalising tripartite wage coordination (for the autumn wage bargaining season)

The GKI figure — we have caught up with the EU average in prices but not in wages — and the opening of wage talks at the beginning of August (’the ice has been broken’ between the trade unions and the ministry responsible for employment policy) together show that the question of wage convergence is being decided now: whether it remains ad hoc or becomes an institutionalised mechanism. MIAK proposes the G18 tripartite wage-coordination council and the FO10 modernisation of wage bargaining: a government–employer–trade union forum issues an annual, non-binding wage guideline, based on productivity and cost-of-living data, differentiated by sector. This (see 6.4.3) turns into practice precisely the principle that the wage level is not an abstract market law but the result of institutional decisions — the only question is whether those decisions are taken in a transparent, predictable forum or in annual improvisation.

3.3 Measurement infrastructure and ex post evaluation for the price-wage scissors (continuous, with an annual report)

The two processes — the deficit path and wage convergence — can only be followed responsibly if there is a common, public measure for them. MIAK would extend the G20 impact assessment system (the Drucker audit — an ex post reckoning of whether a measure really brought the expected result) with an annual ‘price-wage scissors report’ which publicly tracks the distance of the price level and the wage level from the EU average, and signals if the low inflation is only a base effect rather than a lasting turn. This data would be a direct input to the annual recommendation of the wage council proposed in point 3.2 — without it the negotiating parties consult blind.

These three proposals are held together by a common principle: both the deficit path and wage convergence are credible only if they are not a political promise but a rule fixed in advance, measurable and open to being called to account — data-drivenness here is not technocratic decoration but the only way in which the OECD’s 2045 warning and the GKI price-wage figure become not two separate subjects of debate but one common, manageable problem.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Economy A more credible, long-term sustainable debt path; wage convergence placed in a measurable framework The result of the expenditure review and the wage council will only be visible years later; impatience may generate political pressure
Society Wage bargaining becomes more predictable, annual uncertainty falls If the recommendation of the wage council is not binding, the employer side may disregard it
Public administration The ex post evaluation role of the State Audit Office is strengthened, an annual price-wage report is created The new reporting obligation imposes an administrative burden on the statistical and supervisory apparatus

The main question to weigh is timing and credibility: the debt path and the wage council work only if the rules are supervised by an independent actor (the State Audit Office, and the expert secretariat of the wage council respectively), not by the government of the day supervising itself. If the present, still informal opening of wage talks remains without institutionalisation, then once the current favourable inflation figure has passed, wage convergence will again become the object of political bargaining instead of being a data-driven, predictable process.

Part V — Measurability and summary

5.1 What is worth following? (proposed KPIs)

The success of the proposal is worth following on the basis of a few proposed performance indicators (KPIs):

  • the adoption of a fixed, multi-year debt path target with the 2027 budget, and its annual, independent (State Audit Office) ex post evaluation;
  • an annual narrowing of the price-wage scissors (the gap between the distance of the Hungarian price level and of the wage level from the EU average) — not merely further convergence of the price level;
  • the actual issuance and publicity of the first annual wage guideline of the wage council (G18/FO10);
  • the development of inflation after the gradual phasing out of the price measures (the margin cap, the fuel price cut) — confirming or refuting that the present low point really was a base effect.

5.2 Summary

MIAK’s key message: the OECD debt warning and the stalled wage convergence are not two separate problems but two symptoms of the same missing institutional discipline. MIAK asks the decision-maker not to organise the autumn budget debate around the one-off deficit figure or a single good inflation month, but to adopt a multi-year, numerical debt path and to institutionalise the wage talks now beginning in a permanent, data-driven forum. Two MIAK foundational values move together here: data-drivenness, because both the deficit path and the wage recommendation rest on measurable, public indicators rather than on political intuition; and being ideology-free, because the proposal equally rejects the dogma of across-the-board austerity and that of unlimited, unfunded wage increases — the question is methodological, not a matter of faith.

Part VI — Justifications and further sources

6.1 The framing of the press, spectrum by spectrum

The economic press (Portfolio) focused primarily on the technical risks: the effect of the energy crisis on fragile Hungarian growth and on the movement of the forint, and on the fact that ’this is what Hungarian growth may fail on’ — framing deficit reduction as the government’s first serious test in economic policy. The liberal-left and general public affairs band (Telex, HVG, 24.hu, ATV) presented both the GKI price-wage figure and the OECD warning as a failure of convergence — Telex under the title ‘Árakban szinte utolértük az EU-t. Na de mi a helyzet a bérekkel?’ (‘In prices we have almost caught up with the EU. But what about wages?’), while HVG highlighted the opening of the wage talks with the quotation ‘megtört a jég’ (’the ice has been broken’). The pro-government conservative band (Mandiner, Magyar Nemzet) reported the low inflation figure as favourable news in itself, while an analysis in Magyar Nemzet disputed that the good figure was due to the present government. The framings therefore differ not in the facts themselves (the debt projection, the price-wage scissors and the low inflation), but in the attribution of causes and responsibility — in MIAK’s ideology-free reading all three figures point to a single, common institutional deficiency: the absence of a long-term, numerical path and of institutionalised wage coordination.

6.2 Facts and data

  • OECD warning (6 August 2026): on the present deficit path Hungarian public debt could double by 2045.
  • Analysis by the GKI Economic Research Institute (6 August 2026): since 2010 the Hungarian price level has essentially converged with the EU average, the wage level has not.
  • KSH data (7 August 2026): July inflation fell to 1.2 per cent, a low not measured for ten years.
  • Opening of wage talks (7 August 2026): the Hungarian Trade Union Confederation and the ministry responsible for employment policy began consultation on wages.
  • Hungarian GDP growth 2025 (preliminary): +2.1 per cent (KSH).
  • Hungary’s governance quality indicators 2024 (World Bank Worldwide Governance Indicators, WGI): rule of law +0.35, control of corruption −0.17.

6.3 Policy dimensions

  • Economy (programme points) — the centre of gravity of the debt path, the fiscal rule and the measurement of the price-wage scissors;
  • Employment policy and the labour market (programme points) — the institutional framework of tripartite wage coordination and of wage-bargaining modernisation;
  • Demography (background material) — the connection between the failure of wage convergence and the emigration of young, qualified labour.

6.4 Literature in detail

6.4.1 Thomas Piketty: Capital in the Twenty-First Century

Piketty’s central thesis is that when the return on capital (r) durably exceeds the rate of economic growth (g), capital income — profit, interest, dividend, rent — automatically grows faster than wages and output:

“If the rate of return on capital durably and significantly exceeds the growth rate of the economy in percentage terms […], then the risk of divergence in the distribution of wealth increases strongly.”

According to Piketty this relation is not a sign of market imperfection — on the contrary, the more ‘perfect’ the capital market, the more it asserts itself. Applied to the Hungarian price-wage scissors this means: the failure of wage convergence is not a transitory phenomenon that resolves itself, but a structural force which the market does not correct on its own without a targeted institutional response — a progressive capital tax, or the institutionalisation of the wage process.

📖 Source: Thomas Piketty: Capital in the Twenty-First Century

6.4.2 IMF: World Economic Outlook 2025 — Global Economy in Flux, Prospects Remain Dim

According to the October 2025 report of the IMF (International Monetary Fund), a significant part of the advanced economies needs substantial fiscal adjustment to stabilise debt relative to GDP, and the rise in the interest rate environment in itself pushes up the cost of debt service:

“Stabilizing debt to GDP at its 2024 level requires significant consolidation for most countries. […] The calculus of postpandemic debt sustainability is complicated by elevated debt ratios, worsening primary balances, higher interest rates, and a weakening growth outlook.”

The report also gives a concrete figure: euro area public debt relative to GDP could rise from 87 per cent in 2024 to 92 per cent by 2030 under present policies. This international context gives weight to the OECD’s Hungarian warning about a doubling of debt by 2045: the Hungarian risk is not an isolated phenomenon but a sharper domestic variant of a wider advanced-economy trend.

📖 Source: IMF: World Economic Outlook 2025 — Global Economy in Flux, Prospects Remain Dim (October 2025)

6.4.3 Ha-Joon Chang: 23 Things They Don’t Tell You About Capitalism

Chang argues that the wage level is fundamentally shaped by political decisions, not by an abstract, self-acting market law:

“If wages and interest rates are (to a significant extent) determined by politics, then so are all other prices, since changes in wages and interest rates affect the development of every other price.”

According to Chang, immigration rules, interest rate policy and the labour law framework together shape the actual wage level — far more strongly than minimum wage regulation on its own. Projected onto the Hungarian price-wage scissors this is a direct argument for not leaving wage convergence to the market: an institutionalised, tripartite wage coordination forum performs exactly the political and institutional role which, according to Chang, decision-makers play in shaping the wage level in any case — only now within a transparent, predictable framework.

📖 Source: Ha-Joon Chang: 23 Things They Don’t Tell You About Capitalism

6.5 International comparison

Singapore’s National Wages Council, in operation since 1972 (a tripartite body of government, employers and trade unions), is the direct model for MIAK’s G18/FO10 proposal: the body issues a non-binding wage guideline every year, based on productivity data, which over 25 years brought real wage growth of around 5 per cent a year alongside industrial peace. On the debt path side the German Schuldenbremse (debt brake) and the recalibrated economic governance framework of the EU show that a rule fixed in advance with automatic adjustment is not a theoretical novelty but a practice that has been working for decades — the question in Hungary is not the existence of the instrument but the credibility of its introduction and its institutional enforceability.

Economy

  • G15 — Counter-cyclical fiscal stabiliser
  • G18 — Tripartite wage-coordination council
  • G20 — Economic-policy impact assessment system (Drucker audit)
  • G21 — Systematic review of state expenditure

Employment policy and the labour market

  • FO10 — Wage-bargaining modernisation — tripartite wage consultation forum

Proposed new programme point: Annual price-wage scissors report — for the Economy policy area, as an extension of the G20 impact assessment system, publicly tracking the distance of the Hungarian price level and wage level from the EU average.

6.7 List of sources

Press sources (MIAK press monitor, 6 and 8 August 2026 — the underlying daily topics):

Knowledge base references (literature):

  • 📖 Thomas Piketty: Capital in the Twenty-First Century
  • 📖 IMF: World Economic Outlook 2025 — Global Economy in Flux, Prospects Remain Dim
  • 📖 Ha-Joon Chang: 23 Things They Don’t Tell You About Capitalism

Note: in the visible text of the blog only the author and the title of the books appear; the local file path is an internal matter of generation.

MIAK internal materials:

  • MIAK policy area: Economy (programme points; programme point ID: G15)
  • MIAK policy area: Employment policy and the labour market (programme points; programme point ID: FO10)
  • MIAK policy area: Demography (background material)
  • MIAK topic proposal processing, 23 August 2026 — topic 2, score: 95/100

Supplementary public data sources:

  • OECD — debt sustainability warning of 6 August 2026; KSH — consumer price index, July 2026; GKI Economic Research Institute — price and wage level analysis, August 2026; World Bank WGI 2024 — governance quality indicators.

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