In the first month of the year, wages in real terms – excluding the effect of the public work programme -- increased by 6 percent, thus the compelling real wage growth that began in 2013 has continued. The latest wage increase underpins household consumption and consequently fuels economic expansion.

Real wage growth has been driven by Government measures such as the cutting of taxes on labour, the Job Protection Action Plan, employment stimulus measures as well as by zero inflation in January and the positive economic trend reversal observed in 2013.

Net wages in the private sector were 4.4 percent higher, while those in the public sector – excluding public work employees – were up by 8.6 percent in January, compared to the first month of the previous year. Wages in real terms continued to increase in both sectors, while within the national economy real wage growth was as high as 6 percent in the private sector. In case public work wages are also taken into account, real wages in January edged up by 0.9 percent within the national economy.

In January, the average gross monthly wage of full-time employees was HUF 226 600 within the national economy, corresponding to an increase of 0.9 percent year-on-year. Net wage – at HUF 148 500 – was also 0.9 percent higher in comparison to January 2013, excluding the positive effect of family tax allowances.  The average gross wage of public work employees was HUF 78 500 in January. It is noteworthy that thanks to successful employment policy measures over the past year the number of private sector employees increased by 36 thousand or 2 percent at enterprises with at least five employees.

The increase in the number of jobs and real wages has a favourable impact on households’ finances and these factors also boost domestic consumption growth. The recently published, outstanding industrial output and investment data are also confirming that the Government’s growth target will be attainable in 2014.

(Ministry for National Economy)