Average wages in Hungary have risen 13 per cent

The wages in Hungary are rising fast. According to the Central Statistical Office (KSH) average gross wages in Hungary have risen by 13.1 per cent between July 2016 and July 2017 (according to data published in September).

In July 2017 average gross earnings were estimated at HUF290,500 (EUR953). Both the Average Gross Earnings and Average Net Earnings grew by the same extent between January and July 2017, 12.6 per cent, compared to the same period of 2016.         

The Average Gross Earnings in Hungary in the period of January-July 2017 were estimated at HUF290,300 (EUR952), which was a 12.6 per cent change compared to the first seven months of 2016. The sector with the best wages was obviously the business sector, where Average Gross Earnings amounted to EUR998 (+11.2 per cent), meanwhile in public institutions they amounted to EUR868 (15.8 per cent), whereas in non-profit institutions – EUR819 (10.5 per cent). The Average Net Earnings in Hungary in the period of January-July 2017 were estimated at HUF193,100 (EUR634) and in the business sector Average Net Earnings amounted to EUR664, while at the same time they were only EUR577 in public institutions and only EUR545 in non-profit institutions.           

According to KSH, the growth of average wages is influenced by higher minimum wages and the rise of salaries in social services, health services, and among other state employees. The highest average gross earnings were those of financial and insurance employees (EUR1,876), whereas the lowest average gross earnings were in human health and social sectors (EUR592). It should be pointed out that in July 2017, 164,200 citizens of Hungary were employed in public works programs – which had a significant and perceivable effect of a very low unemployment rate. Simultaneously, the consumer prices in Hungary increased in the same period by 2.3 per cent, thus real earnings grew by 10.1 per cent.

According to the Hungarian government, rise in real wages is caused by government measures and market effects. Mihály Varga, the Hungarian Minister of Economy, declared that approximately two-thirds of the wage increase stems from government’s policies, like the wage deal made with employers. He assured that Hungarian economy is strong and has positive impact on wages, and what is more, the inflation remains low. He stressed that the most significant wage growths had been noticed in regions and professions where incomes were considered depressed.

He added that in regions reputed to be poor, such as the Szabolcs-Szatmar-Bereg county in north-eastern Hungary, the increase of average wages was as high as 15 per cent. In his view, since 2010 only Poland can be considered more successful among countries of the Visegrad Group (V4) in the dynamics of wage growth.       

During the recent years the Hungarian government has taken many steps to improve the economic situation in the country, which was in a deep crisis since 2008. According to data of KSH, the growth of Average Gross Earnings amounted to 29.1 per cent between January 2013 and July 2017, however in April 2017 it was 34.7 per cent when compared to January 2013. Meanwhile, Hungary still has the lowest average wages in the V4 Group. In July 2017 the Average Gross Earnings  in the Czech Republic were EUR 1,126, EUR 1,023 in Poland, whereas in Slovakia they were EUR 1,015.

Michał Kowalczyk is a PhD student at the History and Social Science Department of the Cardinal Stefan Wyszyński University in Warsaw. He specializes in Hungarian and Central European politics.

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