“Growth for the first half of the year is in line with the Government’s intentions, in view of the fact that we are convinced that the long-term growth of the Hungarian economy cannot be founded on cheap labour”, Minister for National Economy Mihály Varga said in a statement.

“Accordingly, we are pleased that both net and gross earnings in Hungary increased once again to an outstanding degree, by 14.4 percent in June, resulting in a total wage increase of 12.5 percent or the first six months of the year”, he added. “Thanks also to the moderate inflation environment, the real value of earnings increased by 10 percent during the first half of the year, which is resulting in a major improvement in the finances of Hungarian families”, the Minister highlighted.

Real wages have been increasing continuously in Hungary for four and a half years, which coupled with increased domestic consumption is also tangibly boosting the growth of the Hungarian economy. Thanks to the significant increase in the minimum wage and the guaranteed minimum wage, and parallel with this the six-year wage agreement concluded last year including a tangible decrease in employer contributions, the average gross wage in the private sector exceeded 304 thousand forints in the first six months of this year, the Minister said.

Gross and net wages in the private sector increased by an average of 11% between January and June, which in addition to the effect of wage increases in the public sector have enabled a large, average wage increase of 14.2% excluding the effects of the public work scheme.

With regard to increasing employment, the Minister for National Economy noted that it has been some one and a half decades since the private sector in Hungary has experienced the level of growth observed during the first six months of this year, with the number of staff at enterprises that employ a minimum of 5 people increasing by an outstanding 60 thousand in June.

Mr. Varga said that six-year wage agreement agreed upon on the Government’s initiative would further boost employment and relieve the wage tensions that have developed on the job market, including via increasing activity, adding that during the upcoming years the agreement would result in the decrease or possible elimination of the regional wage gap, with real wages in Hungary increasing by up to 40 percent over a period of six years.

(Ministry of National Economy)