In the first two months of 2017, KSH data show that wage growth picked up and resulted in a year-on-year wage increase of 10.3 percent, in terms of both gross and net wages, Minister for National Economy Mihály Varga said.

As the Minister stressed, modest inflation led to real wage growth of 7.5 percent, and thus an upward real wage trend has been in place for 50 consecutive months.

Concurrently, the number of private sector employees has risen sharply, by 118 thousand, compared to February 2016, hitting a historic high since the collection of relevant data from enterprises with at least five employees began in 1999, Mihály Varga added.

The acceleration of growth in terms of gross and net wages within both the private and public sectors, fuelled by the 15 percent and 25 percent increase of the minimum wage and the guaranteed minimum wage, has been a major driver of real wage increase, he pointed out.

In the period January-February 2017, in the private sector gross and net wages rose by 9.2 percent on average year-on-year, a substantial increase compared to average wage increases of 4-5.5 percent in recent years. In the private sector, real wage growth averaged 6.4 percent. In the public sector, excluding public work wages, gross and net wages in real terms increased by 13.2 percent on average in the observed period.

Employment growth has been underpinned by – besides economic trends – certain Government measures, mainly the incentives provided by the Job Protection Scheme and gradual tax decreases. The Minister said in his opinion wage growth dynamics were set to persist and continue to bolster Hungary’s economic growth.

(Ministry for National Economy)