According to the flash report of the Hungarian Central Statistical Office (KSH) published earlier this morning, wages in real terms continued to increase. In January-May 2014, the average gross wage of full-time employees was up by 2.9 percent year-on-year.

Following an increase of 4.2 percent in April, wages in real terms continued to improve in May as they were as much as 5 percent higher in comparison to the level of one year ago. Family tax allowances, increasing gross wages, stagnating consumer prices and the steady gains in real wages have a remarkably positive effect on household finances.

In the initial four months of the year, average gross wage was HUF 232 000; however, data from the month of May improve statistics: In January-May 2014, the average gross wage of full-time employees was HUF 234 500, up by HUF 2 200.

As far as the initial five months of the year are concerned, average gross wage in the private and public sectors – excluding public work employees -- was HUF 250 900 and HUF 234 700, respectively. Average net wage within the national economy was up by 2.9 percent to HUF 153 600 in January-May 2014. Taking into account the effect of family tax allowances -- the scope of which has been extended by the Government this year – average net wages were several thousands of forints higher, reaching an estimated HUF 160 400 in the initial five months of the year.

At private sector enterprises with at least five employees, in May the number of employees increased by 44 thousand year-on-year. It has been the highest growth figure in three years. The steadily improving labour force demand of the private sector has been the consequence of a rebounding economy, lower taxes on labour, the Job Protection Action Plan and measures stimulating economic activity.

An economic policy aiming to improve the financial well-being of families, economic growth based on work and the stimulating of businesses through favourable interest rates have been the elements constituting the main pillar of the expansion of the national economy.

Incoming data are signalling that dynamic employment growth and significant real wage increases will continue in the coming period.

(Ministry for National Economy)