Too Much, Too Little: How Climate Change Is Reshaping Hungary’s Water Security

Hungary may appear water-rich, but climate change is exposing deep vulnerabilities as droughts intensify, floods remain widespread, water use keeps rising, and ecosystems and infrastructure come under growing strain. The OECD warns that fragmented governance, weak pricing and poor coordination must be fixed urgently to build long-term water resilience and protect the economy and public well-being.

A report, prepared by the OECD Centre for Entrepreneurship, SMEs, Regions and Cities in cooperation with Hungary’s Ministry of Energy, the Ministry of Public Administration and Regional Development, the European Commission’s Reform and Investment Task Force, and over 100 national stakeholders, challenges the idea that Hungary is naturally secure when it comes to water. Although the country has major rivers like the Danube and the Tisza and significant groundwater reserves, about 96% of its freshwater comes from outside its borders. This makes Hungary highly dependent on upstream countries and extremely sensitive to climate change. Rising temperatures, shifting rainfall patterns, and shrinking snow reserves in surrounding regions are making water availability more uncertain and harder to manage.

Climate change is pushing the system to its limits

Climate change has sharply increased both drought and flood risks. Hungary has experienced drought conditions in most of the past 30 years, with the severe drought of 2022 alone accounting for nearly 40% of all climate-related economic losses since 2000. At the same time, floods remain a major threat: roughly one-quarter of the country lies on floodplains, and more than a quarter of the population is exposed to major river flooding. Much of Hungary’s flood protection infrastructure no longer meets safety standards, while droughts are becoming longer, more frequent, and more damaging to agriculture, ecosystems, and the economy.

Rising water use, falling resilience

Despite a declining population, water use in Hungary has increased steadily since 2014. Industry, especially energy production, accounts for most water abstraction, while agriculture consumes the largest share of water that does not return to nature. Irrigated land is expanding rapidly, even as soil moisture declines and crop yields become more unstable. Illegal groundwater use remains widespread, particularly in farming, and a vast network of canals and drainage systems continues to move water out of the landscape instead of retaining it. These patterns reduce natural resilience to drought and make water shortages more severe.

Water quality is also under pressure. Many rivers and groundwater bodies do not meet good ecological standards due to pollution from agriculture, wastewater, and industry. Floods overwhelm sewer systems and spread contaminants, while droughts concentrate pollution and trigger harmful algal blooms, especially in Lake Balaton. Groundwater levels are falling in key agricultural regions, threatening long-term water security.

Economic and social consequences are growing

Water risks affect nearly every part of Hungary’s economy. Droughts and floods cause large losses in agriculture, manufacturing, and energy, while financial institutions are increasingly exposed to climate-related water risks. In rural areas, limited access to sewerage systems and reliance on private wells raise health concerns. Water affordability is also becoming an issue: even with relatively low tariffs, many households spend a high share of their income on water services because incomes are low and infrastructure costs are rising. Climate change is expected to push these costs higher in the future.

A governance system that needs to work better together

Hungary has many water laws, strategies, and institutions, largely shaped by European Union rules and river basin planning. However, the report finds that water governance is fragmented and poorly coordinated. Responsibilities are spread across ministries, agencies, counties, and municipalities, and frequent institutional changes have weakened expertise and accountability. Water pricing and abstraction charges are too low to encourage efficient use or cover costs, and enforcement against illegal water use is weak. Data systems exist but are not well-connected, limiting their value for decision-making.

The OECD argues that Hungary’s main challenge is not a lack of policy ambition, but a lack of coherence. Water issues are still treated separately from agriculture, energy, land use, and regional development, even though climate change links them all. The report calls for a long-term national vision for water security, stronger coordination across levels of government, better use of economic incentives, and greater transparency and public engagement. As climate change makes water scarcity and extremes more common, how Hungary governs water will play a decisive role in its economic stability, environmental health, and social well-being in the years ahead