Many contemporary Budapest restaurants claim that they serve “modern Hungarian food,” but often that's just a catch-all phrase to justify their inflated price points. At its best, modern Hungarian fare is a coming-together of traditional recipes, local ingredients, and a 21st century approach to plating and flavor combinations. This is pretty close to what you will find at Paletta, a family-owned restaurant in Budapest’s District 9, a bit outside the city center.
Let me give you a couple of examples. The catfish soup (€7), a local staple, is made with a nutty coconut milk, rather than the traditional paprika-laced broth. The oxtail stew (€12) comes paired with a creamy mac 'n' cheese infused with a host of local cheese varieties. You may wince if you harbor a purist’s attachment to classics, but both of these dishes were very tasty. Paletta sources its freshwater fish from fish farms near Lake Balaton—commercial fishing in the lake was banned in 2013—as part of their effort to promote the produce of the Balaton region.
Most wines come from the vineyard of the Bezerics family (the owner of Paletta restaurant) located in Western Hungary. Bottles are available for purchase, too. Note that at lunchtime they only serve a two- or three-course pre-fixe from a shorter menu (€6-7).