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Average gross earnings up over 12% y-o-y in Q1

In March 2018, average gross monthly earnings of Hungarians amounted to HUF 331,500, a 11.3% increase year-on-year, the Central Statistical Office (KSH) reported on Wednesday. In the first quarter of 2018, both gross and net earnings grew by 12.4% compared to the equivalent three-month period of the previous year.

Rises of 8% in the minimum wage and 12% in the guaranteed minimum wage, as well as salary adjustments affecting specific areas of the public sector and the employees of some state-owned public service companies, had an impact on earnings growth, the KSH said.

In March 2018, full-time employees’ average gross nominal monthly earnings – as defined by the KSH – amounted to HUF 331,500 at corporations employing at least five persons, budgetary and designated non-profit institutions.

Average net monthly earnings in March were HUF 220,500 excluding family tax benefits, and HUF 229,000 including such benefits. Both gross earnings and net earnings grew by 11.3% compared to the same month of the previous year.

Calculating with annualized inflation of 2.0% in March, real wages rose 9.1%, noted state news wire MTI.

The average gross monthly wage in the private sector grew 8.6% to HUF 342,400, while in the public sector, it jumped 19.3% to HUF 313,700, MTI added.

Wage growth maintained through first quarter

In January–March 2018, full-time employees’ average gross nominal earnings at corporations employing at least five persons, budgetary and designated non-profit institutions amounted to HUF 316,300, and to HUF 328,700 excluding those employed on government work schemes.

Average gross monthly earnings were the highest in financial and insurance activities (HUF 576,600) and the lowest (HUF 205,000) in accommodation and food service activities.

Regular gross earnings (gross earnings without premiums and one-month bonuses) amounted to HUF 296,800.

Average net earnings in Q1 2018 – excluding family tax benefits – were HUF 210,300. In 2018, family tax benefits rose further in the case of families with two children. Taking into account such benefits, average net earnings are estimated at HUF 218,900.

Both gross earnings and net earnings without family tax benefits grew to the same extent in Q1, by 12.4%, while regular gross earnings increased somewhat less, by 11.6% compared to the previous year.

Along with the 2.0% rise in consumer prices compared to the same period of the previous year, real earnings increased by 10.2% in the first quarter.

Monthly average gross wages and salaries according to the SNA concept amounted to HUF 331,800, some 12.6% higher than a year earlier, the KSH added. Within this indicator, the share of other wages and salaries was 4.7% on average.

Earnings data for the period January–April 2018 will be published by the KSH on June 21.

Bigger public sector bonuses

Speaking to state news agency MTI, ING Bank chief analyst Péter Virovácz said the headline rise in gross wages in March was slightly under the 11.7% consensus of analysts. However, the public sector outperformed, supported by a big increase in bonuses, he added.

Public sector bonuses came to HUF 25,800 on average in March, up from HUF 4,500 in the equivalent month a year earlier, data cited by MTI show.

TakarékBank analyst András Horváth said the big increase in public sector bonuses may be linked to performance-based premiums awarded to those administering payouts of European Union funding. TakarékBank puts wage growth for the full year at around 10.5%, he added.