Wages in real terms grew markedly in Q1 2016, by 7.4 percent year-on-year, according to the latest report of the Hungarian Central Statistical Office (KSH). Thus, an upward wage growth trend has been in place for the 39th consecutive month in Hungary. In comparison to March 2015, the number of employees in the private sector – at enterprises with at least five employees – was up significantly, by 65 thousand, in the observed period. This has mainly been the result of growing labour demand, the reduction of taxes on labour, the Job Protection Action as well as to measures aimed at higher economic activity.

In the initial three months of 2016, gross and net wages (which exclude family tax allowances) averaged HUF 253 800 and HUF 168 800, respectively. Taking into account family tax allowances, the average net wage is estimated at HUF 176 000 by the KSH. Excluding public work schemes, in Q1 2016 gross wages averaged HUF 270 400 in the private sector, HUF 260 900 in the public sector and HUF 243 700 in the non-profit sector.

Within the national economy, wages in real terms rose with and without the effect of public work schemes by 7.4 percent and 8 percent, respectively.

Steady growth in the number of jobs and in the amount of wages as well as favourable inflation indicators are expected to further improve the financial status of families, and thus contribute to domestic consumption growth. The positive economic outlook also signals that real wages and employment figures are set to gain more.

(Ministry for National Economy)