Hungarian gross wage growth reaches 10.9 pc in May, average net wage was 665 euros

The average gross monthly wage in Hungary stood at 327,500 forints (EUR 1,000) in May, up 10.9 percent year-on-year, the Central Statistical Office (KSH) said on Friday.

Gross wage growth has been in the double digits since early last year, lifted by an agreement on minimum wage increases as well as a labour shortage.

The average monthly wage included about 18,964 forints in bonuses and benefits.

The average net monthly wage was 217,800 forints (EUR 665).

Excluding the some 136,100 Hungarians in fostered work programmes, gross wages rose by 9.9 percent to 339,978 forints and net wages stood at 226,085 forints. Fostered workers earned a gross monthly 82,166 forints on average in May.

Real wage growth came to 7.9 percent, calculating with a May CPI of 2.8 percent.

In the private sector, which includes state-owned companies, gross wages were up 11.0 percent at 340,974 forints (1041 euros). In the public sector, gross wages climbed 9.9 percent to 302,063 forints.

Hungarians working in industry earned a gross monthly 354,574 forints on average in May. Construction workers earned 250,423 forints, those in the ICT sector made 540,540 forints and those in finance and insurance got 550,762 forints. In the education sector, the average wage was 321,583 forints, and it was 215,105 forints in health and social services.

In the first five months of 2018, the average gross monthly wage stood at 323,400 forints and the average net monthly wage at 215,000 forints, both up 12.1 percent from the same period of last year.

Sándor Bodó, the finance ministry state secretary in charge of employment policy, told public news channel M1 that net wages have grown by 51 percent since 2012 and real wages grew by 32 percent between 2012 and 2017. All tax allowances will be preserved in next year’s budget and most importantly, the social contribution tax is to drop from 19.5 percent to 17.5 percent.

The finance ministry said in a statement that the government’s wage increase in the public sector, increasing demand for workforce in the private sector and a six-year wage agreement have contributed to the continued wage rises. The 2019 budget will support further wage growth, the ministry added.

Analysts interviewed by MTI said

they expect the pace of wage growth to slow down but remain in the double digits as an annual average this year.

Gergely Suppán of Takarékbank forecast 10.8 percent annual wage growth in 2018, with real wages growing by 7.9 percent.

Péter Virovácz of ING Bank said that, with inflation accelerating, it was possible that real wage growth will remain slightly below 10 percent this year, adding that workforce shortage could push wages higher.

As we wrote few days ago, fresh data from Eurostat show that 84.7 percent of recent graduates in Hungary were employed in 2017 compared with an EU average of 80.2 percent, read more HERE.

Also we wrote a week ago, only in Romania and Bulgaria is the mortality rate higher than in Hungary in the EU. Furthermore, the lack of doctors is getting worse; the salary of the healthcare employees did not reach the national average even in 2017. Moreover, fewer graduate at the Hungarian medical universities than the number of those who prepare to leave the country, read more HERE.

Photo: MTI

Source: MTI