Snap21 June 2018Updated 6 months ago

Hungary: Wage growth accelerates

The increase of wages accelerated in April. The labour shortage, wage settlements and the rise of minimum wages still support the dynamic wage growth


Average Gross Wages (YoY)

Consensus (10.5%) / Previous (11.3%)


Average gross and net monthly earnings increased by 12.6% YoY in April 2018, which exceeded the 10.5% YoY market expectations. After the slowdown in dynamics over the last two months, the latest figure suggests some acceleration.

In the details, wages increased by 11.1% YoY in the business sector and by 16.6% YoY in the public sector. Despite the business sector pointing to the second highest increase of premiums and bonuses (21% YoY) in the last 10 months, it could not compete with the 82% YoY growth of premiums and bonuses in the public sector. Regarding the main drivers behind the double-digit wage growth, we see no change at all, as the labour shortage, ongoing wage settlements in the public sector and rise of minimum wages still play a significant role.

Wage growth (% YoY, 3m-mav)


When it comes to labour demand, the big picture is still optimistic. The significant recruitment translated into a 127.5k YoY increase in the number of workers in the primary labour market. Meanwhile the number of fostered workers decreased by 33k YoY to 136.4k.

Evolution of labour demand (Jan-14=0)


Bottom line is, the first four readings of the year are in line or even exceeded our expectations. Regarding the rest of 2018, the above-mentioned drivers could be with us in the upcoming months as well.