Hungary’s wage growth reaches nearly 14 pc in January

The average gross monthly wage in Hungary grew by an annual 13.8 percent to 310,800 forints (EUR 1,000) in January, the Central Statistical Office (KSH) said on Tuesday.

Net wages climbed at the same pace, reaching 206,700 forints.

Calculating with annualised CPI of 2.1 percent in January, real wages rose by 11.5 percent.

Excluding Hungarians in fostered work programmes, the average gross wage increased by 12.7 percent to 323,600 forints.

Commenting on the data, Mihály Varga, the economy minister, told public broadcaster M1 that wages had risen for in 61 consecutive months over the past five years, and the trend was likely to continue in the coming months.

Wage hikes were most apparent in the transport, warehousing, health and construction sectors.

Varga said wages were growing apace in the wake of the six-year wage agreement signed by the government, employees and unions in November 2016, but the rate of wage growth had exceeded expectations.

He underlined the government’s commitment to balanced and sustainable growth. Varga noted that the public debt had been on a downward path for the last 7 years and the budget deficit had been at a benign level for many years.

The economy ministry noted in a statement that after real wage growth of above 10 percent in 2017, real earnings had increased by 11.5 percent this year — mainly due to the career model in the public sector and the government’s six-year wage deal.

The gross minimum wage rose from 73,500 forints in 2010 to 138,000 forints in 2018, and the minimum wage for skilled employees jumped from 89,500 to 180,500 forints. The ministry expects a further substantial increase in wages, thereby boosting the performance of the Hungarian economy in parallel with a continuous expansion in employment, the statement said.

ING Bank chief analyst Péter Virovácz said wage growth exceeded market expectations for an increase of 12 percent. He noted the impact of an 8 percent and 12 percent increase in the minimum wage for unskilled and skilled workers, respectively, on the headline figure.

Takarékbank analyst András Horváth said the shortage of qualified labour, the minimum wage increase and pay rises in the public sector could lift full-year wage growth above 9 percent.

Source: MTI