The increase of wages has picked up in the first four months of 2017, as gross and net wages grew by some 12 percent year-on-year, data compiled by the Hungarian Central Statistical Office (KSH) show, Minister for National Economy Mihály Varga said. Thanks to subdued inflation, wages in real terms increased by 9.2 percent in the observed period, and thus an upward wage trend has been in place for 52 consecutive months.

In the same period, the number of people employed in the private sector, at enterprises with at least five employees, rose by 67 thousand, the largest increase since the turn of the century, he stated.

The six-year wage agreement, which stipulates a major increase of the minimum wage and the guaranteed minimum wage (for skilled workers) as well as the reduction of payroll taxes, has contributed – along with some pro-efficiency measures – to the further growth in the number of jobs that produce high value added, the Minister pointed out.

In the period January-April 2017, gross and net wages in the private sector grew on average by 10.6 percent, while Government measures resulted in a public sector wage increase of 14.4 percent, excluding the effect of public work schemes.

In April 2017 and in the first four months of the year, gross wages averaged HUF 303 000 and HUF 287 000, respectively.  As Mihály Varga stressed, real wages in the public sector grew by 11.6 percent in the first four months of the year, year-on-year, and thus the gap between private and public sector wages continued to narrow. On the other hand, private sector wages in real terms were also up by 7.9 percent.

As the Minister said, strong labour demand is predicted to continue to be underpinned by the capacity expansion projects announced by enterprises, low energy prices, home construction boom and the acceleration of the absorption of EU funds.

As a result of the six-year wage deal, economic and wage growth is expected to gain further momentum, while favourable labour market trends are also seen to remain in place.

(Ministry for National Economy)