In October, wages in real terms increased by 6.2 percent, and thus this was the tenth consecutive month when the purchasing power of wages increased.

According to the flash report of the Hungarian Central Statistical Office (KSH), in January-October 2013 average gross and net wages were up by 3.8 percent and 5.2 percent, respectively, in comparison to data recorded one year ago. The continuous increase of real wages fits well into the Government’s projections and helps revive household consumption and subsequent economic expansion.

Parallel to benign inflation of 1.9 percent for the period January-October, wages in real terms have increased by 3.2 percent since the beginning of the year. In January-October 2013, the average gross wage of full-time employees was HUF 227 800. Those employed within the private sector and the public sector – excluding public work employees -- earned on average HUF 238 400 and HUF 223 700, respectively. Average net wage – calculated without the effect of the family tax allowance – was HUF 149 200 within the national economy following further increase in the period January-October.This figure is 5.2 percent higher compared to data recorded one year ago. In this period, net wages in the private sector were up by 5.3 percent, while in the public sector – excluding public work employees – they increased by 6.8 percent. Wages in real terms were higher in both sectors while within the national economy real wage growth amounted to 3.2 percent in the period January-October 2013. Excluding the effect of public work programmes, the average real wage increase of the public sector surpassed that of the private sector.

As far as monthly data are concerned, in the tenth month of the year the average gross monthly wage of those employed full-time was HUF 229 900 within the national economy, up by 5.7 percent year-on-year. Net wage – at HUF 150 600 – was 7.2 percent higher in comparison to October 2012. Taking into account the low inflation rate of 0.9 percent for October, Hungarian wages in real terms were up by 6.2 percent.

Lowering taxes on wages this year as well as real wage growth owing to the cutting of utility prices help preserve jobs, boost employment and stabilize the financial status of households. In light of recently published better-than-expected industrial and construction sector statistics, the Government’s objective to place the Hungarian economy on a steady growth path appears now to be within reach.

(Ministry for National Economy)