Analysts gave a mixed assessment of wage data. Erste Bank's Zoltán Árokszállási said accelerated wage growth would boost consumption, raising the rate of inflation. But György Barta of CIB Bank said the slower increase in private sector regular wages, watched closely by central bank rate-setters, showed no wage-side inflationary pressure.
Twelve-month gross wage growth in Hungary picked up to 2.3% in September from 1.9% in August, the Central Statistical Office (KSH) said on Friday.
If household consumption picks up, it might be difficult to meet the central bank's 3% mid-term inflation target, Árokszállási said. The National Bank of Hungary could raise rates at the beginning of next year, he added.
Regular gross wages, which exclude bonuses and other one-off factors, rose 3.7% in the business sector in September from the same month a year earlier, slowing from a 3.9% increase in August, showing no wage-side inflationary pressure, Barta said. But pressure could come from recently introduced crisis taxes, a weaker forint and higher raw materials prices, he added.
Árokszállási put average annual inflation at 4.8% in 2010 and 3.6% in 2011. Barta also projected a rate of 4.8% for 2010, but saw CPI falling to around 3% by 2011. The analysts expect household consumption to fall 1.3-2% in 2010 but climb 2-2.5% in 2011. (MTI – Econews)