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Cbank chief says businesses must change ways

Analysis

National Bank of Hungary (MNB) governor András Simor said Hungarian businesses could rein in wage growth in light of slowing inflation and the firmer forint -- a new experience for the country’s companies - in an interview published in Friday’s issue of Világgazdaság.

Simor said private sector wage growth is around 9%, while the central bank tries to bring inflation down to 3%. Hungarian companies are currently in the practice of making job cuts and paying remaining staff more. They should rather be trying to boost efficiency, he said.

Asked about the reason for the forint’s firming, Simor noted that the forint is now moving in tandem with other currencies in the region, rather than with the currencies of less stable emerging markets, such as Turkey and South Africa, as it did early this year.

Asked whether a consistently firmer forint could improve Hungary’s chances for adopting the euro sooner rather than later, Simor said neither the MNB nor the government has a target to join the eurozone at present, but the question will be addressed in the H1 of 2009. (MTI-Econews)

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