Unemployment rate in Hungary may drop in the coming months and average 11% for the year, analysts said on Wednesday.
Hungary's average unemployment rate was 11% in both the 15-74 and the 15-64 age groups in March-May 2011, down from 11.4% in February-April, the Central Statistics Office (KSH) said on Wednesday.
Takarékbank’s Gergely Suppan said the fall in unemployment was caused by the rising demand for labor in the processing industry, seasonality and growing public-work schemes. Suppan said unemployment could wane to 10.2% in the summer, although seasonal effects could cause it to rise to 10.6% by the end of the year and 10.9% by early 2012. The analyst expects an average 10.7% figure for unemployment in 2011 and 10.4% for 2012.
Suppan added that increasing demand in the processing industry could improve employment. The government plans to increase employment by 400,000 jobs in the next four years, 75% of which will be based on public work schemes. However, differences among regions and levels of qualification signify a risk, Suppan said.
Dávid Németh of ING noted that the 11% March-May unemployment rate was slightly better than ING's forecast of 11.1%. Németh also attributed the drop to recently launched public work schemes and improved hiring sentiment in the private sector. The analyst expects a 10.4% unemployment rate in the following months and 10.6-10.8% at the end of the year. Németh expects the average unemployment rate to come to 11% in 2011.