In June, the average income of full-time employees was 11.2 percent higher than the one-year-ago increase of 10.9 percent in May, the Central Bureau of Statistics reported on Wednesday. The average income rose by 11.9 percent in the first half of the year.
Annual growth in real wages was 7.9 percent in June and 9.4 percent in the first half of the year, with 3.1 percent and 2.3 percent inflation.
In June, the average gross wages HUF 329,600, excluding government employees, amounted to 341,700 forint. In the first half of the year, the gross average income amounted to 324,400 forints and 336,900 forints.
The average net result in June, excluding family discounts, was estimated at HUF 219,200 and the discount was estimated at HUF 227,700 according to KSH.
The average income increased by 10 percent compared to June last year, while the public sector saw an increase of 11 percent, excluding government employees.
Growth was impacted by 8% and 12% rise in minimum wage and guaranteed minimum wage, some areas of the budget, as well as wage negotiations for employees in certain public service companies.
Monthly gross income, excluding bonuses, bonuses and other non-payments, grew by 10 percent to 318,000 forint, excluding government employees, since June last year.
The regular gross pay in companies and in the public sector amounted to 315 thousand and 329 thousand forints in June.
The KSH data shows that the number of full-time employees in companies increased by 98,000, that the number of employees in the public sector increased by 11,000 and the number of public employees by 38,000 to 131,000 in one year.
Varga: The performance of the economy is behind the rise in wages
The improving performance of the economy can explain the rise in wages and, in parallel, the increase in employment and investment, said Minister of Finance M1 in the morning.
According to Mihaly Varga, data show that the pay gap persists, supported by the wage agreement that reduces public burdens and changes in tax legislation. The Minister trusts that the process will continue in the coming months.
He also welcomed the fact that income inequality fell, as growth in the most underdeveloped countries exceeded the average. He added that the wages of employees in the public administration, construction, tourism and health sectors are considerable.
The latter is also particularly important because it can stabilize the number of employees and ensure replenishment ", he emphasized.
Similar good wage figures are counted
Market analysts claim that MTI had higher expected earnings growth in June, but caused no surprises. Similar dynamic paylines are also expected in the second half of the year.
Gergely Suppan, the analyst at Takarékbank, told MTI: "In June, the average gross wage grew faster than expectations, and due to the high base of last year, Takarékbank analysts expect slower wage dynamics for the remainder of the year, but a shortage of manpower can force faster wage growth.
Gergely Suppan expects an average wage increase of 11 percent on an average year, with an expected 2.7 percent inflation rising by 8.1 percent. However, due to the reduction of contributions, labor costs will increase by around 1.7 percentage points, which will increase by about 9.3% this year, which seems sustainable with nominal GDP growth of around 8.5-9%.
With this international comparison, the low pay gap does not increase, so according to the analyst it can not cause competition problems in the national economy.
The annual reduction in social security contributions to 2022 and the expected increase in nominal GDP by 6.5 to 7 percent will increase wage dynamics in the following years by approximately 8.5 to 9 percent, resulting in a real wage of 5.5 up to 6 percent becomes possible.
However, due to the increasing shortage of labor, wage dynamics may be stronger, so that wage convergence can be accelerated to the West. However, productivity growth is essential, not only because of wage growth, but also because of labor shortages – the Takarékbank analyst added.
Dávid Németh, chief analyst at K & H Bank, evaluated the data, said that there is no surprise in the wage data, and the double-digit growth can be explained by wage formation in the state sphere, in addition to the minimum wage and the guaranteed minimum wage. He pointed out that the increase in real wages by 9.4 per cent in the first half of the year stimulated the consumption of households.
For the remainder of the year, average net wages can continue to grow 11-12 percent year-on-year and real wages can rise by 9 percent.
"What kind of salary is expected in 2019 depends largely on the negotiations on the autumn wage, and expects the government to achieve a minimum wage and a guaranteed minimum wage of 6-8 per cent," said the chief analyst.