Net wage growth outpaced the increase, climbing 7.3% to 192,100 forints due to a one percentage point cut in the personal income tax rate from January 2016. KSH noted that wages were boosted by a higher minimum wage as well as pay increases for the armed forces and wage top-ups for social services and health-care workers. Excluding the 197,300 Hungarians in fostered work programmes, the average gross wage rose by 5.5% to 305,368 forints, while net wages increased by 7.1% to 203,071 forints. Full-time fostered workers earned gross 79,242 forints on average during the month, 0.7% less than in the same period a year earlier. In 2016, gross wages rose by 6.2% overall and were up by 6.5% excluding fostered workers. Net wages rose by 7.8% and 8.1%, respectively, in the period. Real wages were up by 7.4% in 2016.
Real wages are expected to grow by around 10% this year, primarily as a result of the wage agreement reached between the employers’ association and trade unions for six years starting in 2017, the economy minister said, commenting on the KSH data. Gergely Suppan, analyst at Takarékbank, said real wages in Hungary could grow by 7.6% this year, assuming average annual inflation of 2.4%.