Hungary gross wages climb 12.8 pc in March, but the net wages are still under 640 euros

Budapest, May 19 (MTI) – The average gross wage in Hungary rose by an annual 12.8 percent to 298,276 forints (EUR 960) in March, the Central Statistical Office (KSH) said on Friday.

Net wages grew at the same rate as gross wages, also climbing by 12.8 percent to 198,353 forints (EUR 638).

KSH noted that wages have been boosted by a higher minimum wage as well as pay increases for social services and healthcare workers and some state employees.

Excluding the 149,300 Hungarians in fostered work programmes in March, the average gross wage rose by 12.2 percent to 310,814 forints, while net wages also increased by 12.2 percent to 206,690 forints.

The number of fostered workers dropped significantly compared to the 187,200 registered in February. The last time their number was as low as in March was in May 2014.

Full-time fostered workers earned gross 83,098 forints on average during the month, 5.4 percent more than in the same period a year earlier. Their number fell by an annual 12.6 percent.

Calculating with March twelve-month CPI of 2.7 percent, real wages were up by 9.8 percent.

Regular gross wages rose by 13.4 percent to 275,540 forints, and by 12.8 percent to 286,762 forints without fostered workers.

Excluding fostered workers, business sector gross wages rose by an annual 11.6 percent and regular wages in the sector rose by 12.3 percent.

Also without fostered workers, gross public sector wages were up by 14.4 percent in the year to March, including a 14.5 percent rise in regular wages.

January-March gross wages were up by 11 percent with by 10.7 percent without fostered workers from a year earlier. Excluding fostered workers, business sector gross wages rose by 9.8 percent and public sector wages rose by 13.6 percent in the period.

The number of employees was up by 2.3 percent overall at 3,004,500 in March and 2.7 percent in January-March. The rise was 3.2 percent and 3.3 percent, respectively if fostered workers were excluded.

The number of business sector employees rose by 3.5 percent to 2,031,200 in March without the fostered workers in the sector. The number rose by 3.7 percent in January-March.

Without fostered workers the number of public sector employees fell by 0.2 percent to 694,600 in March. The January-March average was down by an annual 0.3 percent.

Péter Virovácz of ING Bank said wages for the year are typically set in Q1, therefore wages could keep rising at around the same rate in the next 9 months as well. Inflation will be higher this year compared to the last one, but even so real wages will increase and the purchasing power of consumers will grow.

K+H Bank analyst Dávid Németh said the large increase in wages had been expected as the minimum wage of skilled and unskilled workers rose and companies have raised pay in several sectors because of a shortage of labour.

Erste Bank chief analyst Gergely Urmossy said higher consumer demand would further accelerate inflation which could average 3.5 percent by 2018.

Commenting on the data, Economy Minister Mihály Varga told public news channel M1 that all sectors of the economy had seen wage increases in March. He attributed the increases to labour shortages and a 6-year agreement signed between the government, unions and employers to increase the minimum wage at the end of 2016.

He noted that under last year’s agreement, the minimum wage for unskilled and skilled workers had risen by 15 percent and 25 percent, respectively, for this year, and will rise by another 8 percent and 12 percent, respectively, from 2018.

He said Hungary’s Q1 GDP growth rate of over 4 percent demonstrated that expectations of continued wage growth for the rest of the year and a rise in consumption were justified.

Photo: Daily News Hungary

Source: MTI