Hungary gross wages are very low but climb 5.7 pc in December

Budapest (MTI) – The average gross wage in Hungary rose by 5.7 percent year-on-year to 288,800 forints (EUR 936) in December, Central Statistical Office (KSH) said on Monday.

Net wage growth outpaced the increase, climbing 7.3 percent to 192,100 forints (EUR 622) because of a one percentage point cut in the personal income tax rate from January 2016.

KSH noted that wages have been boosted last 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 197,300 Hungarians in fostered work programmes, the average gross wage rose by 5.5 percent to 305,368 forints, while net wages increased by 7.1 percent to 203,071 forints.

Full-time fostered workers earned gross 79,242 forints on average during the month, 0.7 percent less than in the same period a year earlier.

In 2016, gross wages rose by 6.2 percent overall and were up by 6.5 percent excluding fostered workers. Net wages rose by 7.8 percent and 8.1 percent, respectively, in the period. Real wages were up by 7.4 percent in 2016.

Real wages are expected to grow by around 10 percent this year, primarily as a result of the wage agreement reached between the employers’ association and trade unions for six years starting in 2017, the economy minister said, commenting on the KSH data.

Under the agreement the minimum wage for unskilled workers went up by 15 percent at the start of this year and by 25 percent for skilled workers, Mihaly Varga said at a press conference. He further noted a significant reduction in payroll taxes burdening employers.

Gergely Suppán of Takarékbank said real wages could grow by 7.6 percent this year, assuming average annual inflation of 2.4 percent.

Source: MTI/KSH