Hungarian gross wages rose by 10.6 pc yr/yr in January

The average gross wage in Hungary rose by 10.6 percent year on year to 343,469 forints (EUR 1,070) in January, the Central Statistics Office (KSH) said on Friday.

Net wages grew at the same pace, reaching 228,407 forints.

Wage growth in Hungary has been in the double digits for almost two years, since the government, employers and unions agreed on a series of minimum wage increases paired with payroll tax cuts.

Calculating with twelve-month CPI of 2.7 percent in January, real wages were up by 7.7 percent.

Excluding the 112,400 Hungarians in fostered work programmes, the average gross wage rose by 9.6 percent to 354,200 forints, while net wages grew at the same rate to 235,550 forints.

Excluding fostered workers, the average gross wage in the business sector, which includes state-owned companies, rose by 11.6 percent to 360,400 forints. The average wage in the public sector increased by 3.8 percent to 341,000 forints.

KSH noted changes to its data sourcing first appearing in the January statistics: it is phasing out its practice of monthly data collection and instead getting data on wages and headcount from the National Tax and Customs Authority (NAV) and, in the case of the public sector, from the State Treasury.

While reducing the data provision burden, the new sources bring a richer set of data, KSH said.

The new data sources confirm a gender pay gap: men employed full time in Hungary earned gross 376,700 forints in January, while women earned 311,300 forints.

Commenting on the statistics, Finance Minister Mihály Varga said wages had grown in parallel with jobs growth. He noted that wage increase in the private sector was even higher than in the public sector. The extremely low unemployment rate of 3.6 percent forced employers to keep skilled workers by increasing their wages, a statement by the finance ministry said.

In the long term, wages in the business sector and the public sector should not diverge, which is partly why wages for police and defence staff, skilled workers in the health sector and local council employees have been increased, he added.

In comparison with Visegrád Group countries, gross average wages grew fastest in Hungary between 2010 and 2019, Varga said.

Compared with January 2010, net average wages have grown by 64 percent, in the case of families with a child by 70 percent, families with two children by over 83 percent and in the case of three or more children, net average wages doubled, he said.

K+H Bank senior analyst Dávid Németh said real wage growth could reach 7 percent for the fourth year in a row this year, supported by minimum wage increases and the labour market shortage. “This could be problematic for many companies,” he added.

Takarékbank analyst Gergely Suppán said January wages rose more than expected. He put the full-year increase at 9.6 percent and said real wages could grow by a little more than 3.5 percent, assuming an average annual inflation rate of 3 percent.

Featured image: MTI

Source: MTI