Hungarian net wage growth slows in September: 718 euros – UPDATE

Wage growth in Hungary slowed to an annual 8.8 percent on average in September from 9.1 percent in August, data released by the Central Statistics Office (KSH) on Monday show.

In absolute terms, the average gross monthly wage for full-time employees stood at 392,300 forints (EUR 1,080).

The average net wage was 260,900 forints (718 euros).

Calculating with a twelve-month CPI of 3.4 in September, real wage growth stood at 5.2 percent.

Excluding the 90,800 Hungarians in fostered work programmes – who earned on average gross 80,800 forints in September – the average gross monthly wage in Hungary was 402,900 forints.

The average gross wage in the business sector, which includes state-owned companies, rose by 9.9 percent to 406,100 forints, excluding fostered workers. The average gross wage in the public sector, excluding fostered workers, increased by 8.5 percent to 400,500 forints.

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For the period January-September, wage growth reached 9.8 percent.

The finance and insurance sectors paid the highest salaries, an average gross 656,300 forints (1807 euros), while Hungarians in the commercial accommodations and catering sector had the lowest monthly pay of 248,300 forints.

KSH noted that men earned, on average, 18.5 percent more than women in January-September.

Commenting on the data, a state secretary of the innovation and technology ministry said real wages in Hungary had been growing for 93 consecutive months.

The government’s guaranteed wage minimum has been beneficial for higher wages too, Sándor Bodó said. Between 2010 and 2020, the minimum wage has grown from 73,500 forints to 161,000 forints, and the minimum wage for skilled labourers has grown from 89,500 forints to 210,600 forints, he noted.

The construction and engineering sectors have seen the largest growth this year, while the financial and energy sectors continue to offer the highest salaries, he said.

Government measures have raised wages in the public sector, in line with the country’s performance, he said.

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UPDATE

Financial analysts noted that wage growth remained robust despite the pandemic.

Takarékbank’s András Horváth said that wages continued to grow, with annual wage growth expected around 10 percent.

Depending on ongoing negotiations, next year’s growth may come to around 8.5 percent, he said.

Péter Virovácz of ING bank said a big question was whether the sides would be able to agree on a minimum wage for next year. The previous wage agreement’s 6 percent increase in real wages may appear unrealistic amidst the current crisis, he said, adding that tensions could ensue as a result. Also, the fact that different sectors are bearing the burden of the crisis to different degrees may produce additional tensions, since the recommendations and agreements fail to take these discrepancies into account.

K+H Bank analyst Dávid Németh said the minimum wage had the effect of bumping up wages in general, though a one-off payment to health-care workers in the middle of the year also played a role.

Whereas in previous years companies labour shortages had been the main driver of wage increases, the pandemic has led to redundancies, affecting the wages of various sectors differently.

For example, accommodation and hospitality jobs have contracted by 17 percent due to the pandemic, while manufacturing jobs fell by 5 percent. IT and communications jobs, however, saw a 5 percent annual increase in the first nine months of the year, he noted.

Gábor Regős of Századvég Gazdaságkutató noted that the data only showed the changes of full-time wages, and did not reflect employment changes in low-paying hospitality jobs, which were likely to have seen more layoffs and part-time employment than other sectors.

Source: MTI