Double-digit wage growth seen continuing in 2018
In February 2018, average monthly gross earnings amounted to HUF 306,500, 11.9% higher than a year earlier. In January–February 2018, average gross earnings amounted to HUF 308,700 and net earnings to HUF 205,300, both up 12.9% compared to the first two months of 2017, earnings data from the Central Statistical Office (KSH) show.
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 employees of some state-owned public service companies, impacted earnings growth, the KSH stated.
In February 2018, full-time employees’ average gross nominal monthly earnings – as defined by the KSH – amounted to HUF 306,500 at corporations employing at least five persons, budgetary and designated non-profit institutions. Average net earnings in February were HUF 203,800 excluding family tax benefits, and HUF 212,300 including such benefits.
In January–February 2018, average gross monthly earnings were the highest in financial and insurance activities (HUF 555,600) and the lowest (HUF 204,500) in accommodation and food service activities.
In 2018, family tax benefits rose further in the case of families with two children. Taking into account family tax benefits, average net earnings in the first two months reached an estimated HUF 213,700.
Along with the 2.0% rise in consumer prices compared to the same period of the previous year, real earnings increased by 10.7% in January–February, the KSH noted.
Monthly average gross wages and salaries according to the SNA concept amounted to HUF 321,500, some 12.8% higher than a year earlier.
Commenting on the data to state news agency MTI, András Horváth of TakarékBank said the bankʼs analysts expect annual wage growth to reach 10% in 2018 in response to shortages of qualified labor, significant wage rises in the public sector and minimum wage hikes. He estimated real wage growth at close to 7.5% in 2018, while adding that the pace of the increase could slow due to last yearʼs stronger base figures.
Dávid Németh of K&H Bank forecast 10% wage growth in gross and net terms this year, and 8% growth in real terms, while Péter Virovácz of ING Bank agreed that annual wage growth could reach double-digit figures again this year.
Earnings data for January–March 2018 will be published by the KSH on May 23.
Private sector wages set to climb
Private sector wages in Hungary are set to rise by 12-13% this year, MTI reported, citing pro-government daily Magyar Idők.
László Parragh, who heads the Hungarian Chamber of Commerce and Industry (MKIK), told the paper that wages could continue to rise at an annual rate of 12-13% in the coming years. The "original sin" of Hungarian economic policy after the change of system was believing that low wages would attract investors, he added.
Melinda Mészáros, chairman of union association Liga, agreed that private sector wages would climb by 12-13% this year, on average. While base wages will rise about 10%, she predicted, higher fringe benefits will add 2-3% to employeesʼ remuneration.
Low earners will see the biggest wage rises this year, as last year, Mészáros noted. Differences in regional pay scales remain marked, but are gradually declining, she added.
Imre Palkovics, who heads the National Federation of Workersʼ Councils (MOSz), said wages at state-owned companies rose 10% on average from January.
Gross wages in the private sector, which includes state-owned companies, climbed 11.6% last year, MTI recalled, lifted by an agreement between employers, unions and the government that paired minimum wage rises with payroll tax cuts over several years.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.