money income

The average gross wage in Hungary rose by an annual 12.8 percent to 295,836 forints (EUR 944) in October, the Central Statistical Office (KSH) said on Wednesday.

Net wages grew at the same pace as gross wages, also climbing 12.8 percent to 196,731 forints.

KSH noted that wages have been boosted by a higher minimum wage as well as pay increases for social services and healthcare workers and some state employees.

Commenting on the data, Economy Minister Mihály Varga said the wage growth was in line with the government’s expectations.

October’s wage growth puts Hungary in second place regionally, behind Poland and ahead of Slovakia and the Czech Republic,

Varga told public news channel M1. He said the government wanted Hungary to close the regional wage gap at a faster pace.

The minister noted that under a 6-year agreement reached at the end of last year between the government, employers and unions, minimum wages for unskilled workers have risen by 15 percent and for skilled workers by 25 percent this year.

That agreement and further steps taken in the application of career models have delivered an increase of more than 10 percent in real wages, Varga said.

Péter Virovácz of ING Bank said wages could rise annually by 13 percent on average.

The pace of wage increases has slowed slightly for the first time since June but net real wages have risen 10.2 percent so far this year, at an unmatched pace.

Pay rises in the public sector and labour shortage are driving wage increases.

Orsolya Nyeste of Erste Bank said wage increase has slowed partly because of base effects. As real wages are significantly up and inflation is low, the increase in domestic consumption is significantly boosting GDP growth in Q4. Wages could rise by 12-13 percent this year, then by 7-8 percent next year.

Analyst Dávid Németh of K+H Bank said the rate of wage increase could be in the double digits in 2017 and should still be considerable, although somewhat more constrained next year. Real wages could rise by 10 percent in 2017 and by 8 percent in 2018.

András Horváth of Takarékbank said wage increases could be above 13 percent this year because of the rise in the minimum wage for skilled and unskilled workers. Wage increases could average 9 percent next year, he said.

Source: MTI

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