Hungarian real wages have been falling for nine months – UPDATED

According to the latest data published by the Hungarian Central Statistical Office, the Hungarian real wages have been falling for nine months because the average wage increase is lower than the inflation.

Gross wages in Hungary grew by an annual 17.9 percent in May, to 567,800 forints (EUR 1,499), the Central Statistical Office (KSH) said on Tuesday.
Net wages rose by 17.7 percent to 377,600 forints, KSH said. Real wages fell by 3.0 percent, calculating with a May CPI of 21.5 percent. The gross median wage increased by 17.8 percent to 449,100 forints. Excluding the 67,700 Hungarians working full time in fostered work programmes, the gross monthly wage in Hungary was 577,600 forints.

Commenting on the data, the ministry for economic development said the government was keeping up efforts to protect families and jobs despite the “difficult economic situation amid the protracted war and failed Brussels sanctions”. It has introduced mandatory discounts in food stores, which it will raise to 15 percent from August, and launched an online price monitoring system. The latter has already succeeded in reducing the price of monitored products by 6.7 percent, the statement said.

Inflation has dropped by one-fifth since it peaked in January, the ministry said. The government has also raised the amount available on SZÉP cards, a wage benefit system, by 200,000 forints. Falling inflation is expected to allow real wages to rise in the near future, it said.

Minister: Single-digit inflation, sustainable growth main goals

Hungary’s biggest task is to reduce inflation to single digits, while growth must be restored and set on a sustainable path, the minister of economic development said at a European Union Competitiveness Council meeting held in Bilbao. The ministry cited Marton Nagy saying on Tuesday that the government had introduced effective measures to reduce inflation, such as compulsory price cuts for retailers and an online price monitoring system. Additionally, in order to return to 4-5 percent economic growth, growth in real wages and consumption must be restored in the short term, and a turnaround in competitiveness must be achieved in the medium term, he said.

Nagy said the Hungarian economy had a “very favourable outlook”. With the help of a boost in competitiveness, the economy could return to a growth path in 2024 and economic reforms started in 2010 can be continued, he said. The goals include full employment, higher wages, stronger families, and Hungary reaching 85-90 percent of the EU’s level of development by 2030, with GDP increasing to 160,000 billion forints (EUR 430bn), he added.

Digital and green transition must be accelerated, requiring a dual transformation in the economy, he said. Hungary’s energy independence must be further increased and electricity imports reduced to zero by 2030, he added. He also said that families and full employment must be protected so guest workers can only be used in a controlled and transparent way, keeping in mind Hungarian labour market trends and demographic goals.

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