Hungary’s gross wage growth continues to slow in July – UPDATE
Budapest, September 20 (MTI) – The average monthly wage in Hungary rose by an annual 5.1 percent to 256,900 forints (EUR 835) in July, the Central Statistical Office (KSH) said on Tuesday.
Wage growth slowed for the third month in a row after peaking this year at 6.5 percent in March and April.
Net wages rose at a faster clip during the period, climbing 6.7 percent to 170,800 forints (EUR 578) on the back of a one percentage point reduction in the personal income tax rate.
In January-July, gross wages grew by an annnual 5.9 percent. KSH attributed the increase to a 5.7 percent rise in the minimum wages for skilled and unskilled workers, higher stipends for the armed forces and a salary top-up for Hungarians employed in social services.
Economy ministry state secretary Péter Cseresnyés said the data reflect a favourable trend in real wages over the past 43 months. Real wage growth accelerated from an annual increase of just over 7 percent in the past few months to 7.4 percent, on the back of low inflation combined with a one percentage point reduction in personal income tax, he said.
Cseresnyés said real wages are expected to continue growing during the autumn, as a shortage of skilled labour would push wages up.
Excluding people in fostered job schemes, the real wages of public employees such as teachers, health workers and law enforcement staff had risen by 11 percent, he noted. The same measure for the private sector was a rise of 6.7 percent, he added.
ING Bank senior analyst Péter Virovácz said that due to the ongoing central wage-hike schemes, the real wages of public employees had increased more dynamically, but this trend would also have an impact on the private sector, where wages are also driven up by a shortage of manpower.
Takarékbank analyst Gergely Suppán said that due to deferred consumption over the past few years and a record level of the household net savings, Hungary’s economic growth would probably be driven by household consumption in the years to come.