Parallel to double-digit income growth driven by, among other factors, the six-year wage agreement, the number of people in employment has also been rising in Hungary. Their number has increased by 750 thousand over the past eight years, Minister of Finance Mihály Varga said, commenting on the latest jobs data released by the Hungarian Central Statistical Office (KSH).

The Government continues to target full employment, the Minister noted, “This was the goal we were focusing on in the drafting of the 2019 budget and the tax package”. A downward trend of 71 months has resulted in an unemployment rate of 3.7 percent, and the number of jobless people fell to one-third of the figure registered eight years ago, he pointed out.

Over the past one year, the number of people in employment rose by 64 thousand, while the number of people hired in the private sector was up by 108 thousand. The number of participants in public work schemes and those working abroad fell by 41 thousand and a couple of thousand, respectively. This clearly shows that significant wage hikes of recent years have prompted public work employees to get a private sector job and persuaded people who had worked abroad to move back home. The employment rate rose to above 69 percent from 60 percent registered in 2010, and this figure is well above the EU average, Mihály Varga added. The Government is working to remove obstacles in the way of elderly jobseekers with the aim of activating labour reserves. In addition, jobseekers who newly enter the labour market may benefit from tax incentives; this will become applicable for formerly inactive jobseekers along with the current beneficiaries: career-starters, long-term unemployed people and mothers who return to work after maternity leave.

Provided the parliament adopts the motion, tax breaks would become applicable not only up to HUF 100 thousand but up to the amount of the prevailing minimum wage. In harmony with the six-year wage agreement, the rate of social contribution tax may decrease by 2 percentage points, to 17.5 percent, and this would incentivize enterprises to increase hiring and give better wages, the Minister noted.

(Ministry of Finance)