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Private sector wages in Hungary are set to rise by 12-13 percent this year, daily Magyar Idők said on Friday, citing business and union leaders.

László Parragh, who heads the Hungarian Chamber of Commerce and Industry (MKIK), told the paper that wages could continue to rise at an annual rate of 12-13 percent in the coming years.

The “original sin” of Hungarian economic policy after the change of political system in 1989-1990 was believing that low wages were key to attracting investors, he added.

Melinda Mészáros, chairman of unions association Liga, also said private sector wages were likely to rise by 12-13 percent this year.

Base wages will increase by around 10 percent, while higher fringe benefits will add 2-3 percent to pay, she added.

Low earners will see the biggest wage rises this year, just as last year, Mészáros said. Differences in regional pay scales remain marked, but are gradually declining, she added.

Imre Palkovics, who heads the Labour Councils, said wages at state-owned companies grew by 10 percent on average from January.

Gross wages in the private sector, which includes state-owned companies, grew by 11.6 percent last year, lifted by an agreement between employers, unions and the government that paired minimum wage rises with payroll tax cuts over several years.

Source: MTI

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