Thanks to moderating inflation, a finalized proportionate, flat-rate personal income tax system and several other Government stability measures, the latest data signals that the purchasing power of wages within in the national economy increased for the second month in a row.

According to the latest statistics of the Hungarian Central Statistical Office (KSH), in February 2013 the average gross wage of full-time employees was HUF 222,354 in the national economy, which constitutes an increase of 2.7 percent compared to the corresponding period of the previous year. Net wages – at HUF 145,643 – were up by 4 percent compared to February 2012, which figure, however, does not take into account the additional positive impact of family tax allowances for children. Under benign inflation in February (2.8 percent) wages also increased in real terms.The increase in wages may be a catalyst of economic growth via its positive effect on consumption.

In the second month of the year, gross wages in the private sector were 1.2 percent higher, whereas net wages increased by 2.7 percent in comparison to the corresponding period of the previous year. The monthly gross wages of full-time employees at budgetary institutions – excluding public work employees – were 3.8 percent higher compared to the same period of the previous year, while net wages were up by 4.8 percent. If calculated with an inflation rate of 2.8 percent in February, real wages in the public sector increased by almost 2 percent.

In January-February 2013, the average gross wage for full-time employees was HUF 223,089 within the national economy. Employees in the private and public sectors (excluding public work) earned on average HUF 229,412 and HUF 212,461, respectively, while the average wage for public work employees was HUF 80,800. In the first two months of the year, gross and net wages increased by 2.6 percent and 3.9 percent, respectively, compared to the level of the same period last year.

Net average wages were up by 3.6 percent in the private sector, while at budgetary institutions the net wage increase amounted to 3.8 percent (excluding public work). In the first two months of the year, the purchasing power of wages increased in both sectors as well as within the national economy.

Employees in the financial and insurance sectors have continued to be top earners followed by information and communication as well as energy industry sectors. Wages were lowest in the hotel trade and catering sectors.

(Ministry for National Economy)