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In spite of higher wage rise, inflationary pressure absent

Gross wages rose faster than expected in February, but the increase does not augur inflationary pressure, analysts told MTI on Thursday. Gross wages in Hungary rose 6.9% in the twelve months to February, picking up from a 4.3% year-on-year rise in January, the Central Statistics Office (KSH) said Thursday morning.
    The growth of regular wages, excluding one-off premiums and bonuses, also accelerated, to 7.9% yr/yr.
    MKB Bank chief analyst Zsolt Kondrát said gross wages rose at a faster clip than expected, but net wages climbed at a slower rate – rising by 2.5% – because of tax changes, thus posing little inflationary pressure, he added. He said real wages were likely to fall significantly this year, causing consumption to decline.
    Erste Bank's Zoltán Árokszállási said he did not expect a long-term spiral of wage increases, adding that the February increases could be attributed to a very low base, a rise in the minimum wage and wage compensation for employees who would otherwise take home less because of tax changes. He said the National Bank of Hungary's base rate would likely remain high as long as uncertainty surrounding Hungary's talks on precautionary financial assistance from the International Monetary Fund persists.