The pay rise and tax reduction agreement concluded with employers and workers last November is a success, and in consequence, employment has further increased and unemployment has decreased, Minister of National Economy Mihály Varga said in response to the latest employment data released by the Central Statistical Office.

The Minister highlighted that, thanks to the genuine expansion of the Hungarian economy and the Government’s successful employment policy, following a steady decrease for 61 months, the unemployment rate has fallen to 4.2% on an annual basis. As a result, the number of those in employment has increased by 724 thousand since the change of government in 2010, and the bulk of the increase has taken place in the local competitive sector, the Minister of National Economy added.

The primary labour market in Hungary has increased by more than 100 thousand in May to July 2017 on an annual basis, and as a result, the number of those in employment has risen to 4 million 434 thousand, a 27-year record.

Mr Varga remarked that, in response to the positive processes taking place on the competitive market, there has been an increase of 107 thousand on the domestic primary labour market, while the number of those engaged in public works schemes has decreased by 40 thousand and the number of those working abroad has decreased by 5 thousand in one year. As he said, it was mainly the six-year wage agreement concluded at the initiative of the Government that  boosted the improved employment figures of the competitive sector, thanks to which there has been increased activity and real wages have increased by 10 per cent this year. The significant rise in the minimum wage and the guaranteed wage minimum, and parallel with this, the genuine reduction of taxes payable by employers further encourage the efforts of businesses to improve their efficiency, and thereby contribute to the enhancement of competitiveness as well, the Minister added.

Mr Varga said: Hungary was the country with the fourth lowest unemployment rate in the European Union in June; the level of unemployment was only lower compared with Hungary in the Czech Republic, Germany and Malta. The rate of unemployment among young people has decreased from almost 30% in 2010 to around 10%, and the measures of the Job Protection Campaign serving to promote the employment of young people under the age of 25 years played a major role in the positive processes.

The Minister added: the reforms carried out on the Hungarian labour market, the programmes serving to promote the development of the economy, the reduction of the taxes on employment, the significant increase of the minimum wages and the growth turnaround which took place in 2013 have all greatly contributed to the considerable rise in the number of people in employment.

(Ministry for National Economy)