The figure is significantly lower than the market expectation of 8%, with analyst forecasts in the range of 6.5-9.5%. However, private sector wage growth remains elevated. The net wage fell 0.5% year-on-year, slowing in January because of the impact of higher taxes, and is expected to remain depressed. However, private sector wage growth remained above-average at 8.0% gross compared to 10.4% the month before, and 1.4% net compared to 3.4% in January.
„The key component to watch in the wage statistics will be the development of the regular payments in the private sector,” said analysts at Budapest Economics. „The Monetary Council keeps a close eye on this wage category, thus the figure will influence the market’s policy rate expectations,” they continued. Hungary’s central bank said earlier that it is watching wage growth carefully for a signs that inflation expectations remain high. Inflation is thought to have peaked at 9% in March, which analysts say would allow the central bank to cut the 8% base rate by 1% – 1.5% by the end of the year, with the first cut of 0.25% expected in June. (abcmoney.co.uk)
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