Hungary October gross wages up 5.4 pc – UPDATE

Budapest (MTI) – The average gross wage in Hungary rose by an annual 5.4 percent to 262,200 forints (EUR 835) in September, the Central Statistical Office (KSH) said on Tuesday.

Net wage growth outpaced the increase, climbing 7 percent to 174,393 forints due to a one percentage point cut in the personal income tax rate from January.

KSH noted that wages have been boosted this year by a higher minimum wage as well as pay increases for the armed forces and wage top-ups for social services and healthcare workers.

Excluding the 203,000 Hungarians in fostered work programmes, the average gross wage increased by 5.2 percent to 277,298 forints, while net wages rose by 6.8 percent to 184,404 forints.

Full-time fostered workers earned a gross 76,745 forints on average during the month, 0.6 percent more than in the same period a year earlier.

UPDATE

Analysts said they expected the rapid increase of wages to continue over the next year, citing a labour shortage and a steep rise in the minimum wage.

There is near full employment and this is likely to remain the case in 2017, Erste Bank analyst Gergely Urmossy told MTI. As a result household consumption could be again the main engine behind GDP growth, which could rise to 3.4 percent from 2.1 percent this year, he said.