Earnings in real terms have been rising for 66 months now: gross earnings and real earnings were up year-on-year by 11.9 percent and 9.4 percent, respectively, in the first half of 2018, Minister of Finance Mihály Varga said, commenting on the data.

Rising earnings and dynamic growth in the number of people in employment have boosted household consumption and resulted in a higher amount of financial savings.

Earnings growth will be underpinned by next year’s budget, as – in line with the six-year wage agreement brokered in November 2016 – payroll taxes are set to be reduced further and wage hikes in the public sector are to be continued, the Minister said. The 66-month upward trend confirms that taking a job is increasingly worth it in Hungary. In addition, cutting back the number of public work employees will also add to the momentum of real earnings growth as wages in the private sector, where former public work employees usually land a job, are much higher. Another instrument which has helped earnings rise has been family tax allowances, Mihály Varga noted.

The fact that double-digit earnings growth and outstanding job growth were parallel phenomena shows that the expansion of the Hungarian economy has been continuous and balanced, he pointed out.

Gross and net earnings averaged HUF 324 000 and HUF 216 000, respectively. Including family tax allowances, net earnings averaged even more, HUF 224 000.

Gross earnings edged up to HUF 324 000 in the first half of 2018, while net earnings averaged HUF 216 000 in the observed period. Including family tax allowances, net earnings averaged HUF 224 000. Steadily risings real earnings are expected to fuel domestic consumption which in turn may lead to higher GDP growth.

(Ministry of Finance)