Tightening labor market could produce 'sustained' wage growth - MNB

MNB

Cyclical tightening in the labor market resulting from the economic recovery could keep wage growth high, the National Bank of Hungary (MNB) said in a quarterly report, according to news agency MTI.

MNB said corporate labor demand "rose considerably" in past months and faces supply constraints again in certain sectors.

A gauge of business sentiment showed companies were already planning to raise headcount in all sectors in April and May, parallel with an improvement in employment expectations, suggesting those supply constraints "may evolve", it added.

"In view of the tightening labor market, the increase in labor demand will run into supply constraints, presumably resulting in sustained wage growth," MNB said.

Annual wage growth in the private sector stood at 9.8% in 2020 and slowed only slightly to 8.5% in Q1 2021.

MNB pointed out that the impact of the coronavirus crisis on employment in Hungary was muted compared to the effect of the 2008 financial crisis: while the jobless rate rose to 4.2% in April 2021 from a pre-crisis level of around 3.5%, unemployment came close to 11% by the end of 2009.

ADVERTISEMENT

Almost half of Hungarians get fringe benefits, survey shows Analysis

Almost half of Hungarians get fringe benefits, survey shows

Operative corps for economic recovery decides on further mea... Government

Operative corps for economic recovery decides on further mea...

Healthcare Roadshow Highlights Innovation, Screening Awarene... Interview

Healthcare Roadshow Highlights Innovation, Screening Awarene...

Zsa Zsa Gabor's ashes buried in Budapest City

Zsa Zsa Gabor's ashes buried in Budapest

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
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.