Hungary is very close to full employment, ING Bank’s senior analyst Péter Virovácz told pro-government economic news site, Világgazdaság. However, large disparities can be seen between the regions.
The expert refers to the Central Statistical Office’s (KSH) data that reported in recent months the employment of some 4.7 million people, of which 4.5 million were working in the primary labor market. It was more than 30 years ago that such a high employment rate was registered (during Hungary’s regime change in 1989-1990.)
The primary labor market excludes those working in the government’s public works scheme and workers abroad.
According to the analyst, the labor market has become so full by now that it is virtually impossible to increase the number of people in employment any further.
On the other hand, he also highlighted large disparities between the Hungarian regions: while the unemployment rate in Northern Hungary amounts to as high as 7%, it is below 2% in Western Hungary, which means that this gap should be eliminated- something that would require comprehensive reforms.
Virovácz added that it is certainly not possible to remain at the current level in the long run, as every year more people are leaving the labor market than enter it. In addition, the quality of the labor force may also be in question with increases in the activity rate.
featured image illustration via Péter Komka/MTI