The KSH noted that wages were boosted this year by a 5.7% increase in the gross minimum wage, a wage rise for the Armed Forces and a wage supplement paid to social sector employees. Excluding the 210,300 Hungarians in fostered work programmes, the average gross wage rose by 7.2% to 280,040 forints, while net wages increased by 8.8% to 186,227 forints.

Full-time fostered workers earned gross 79,828 forints on average in April, 3.1% less than a year earlier. The total number of employed, which includes Hungarians who worked for at least one hour during the week a labour survey is conducted, averaged 4,293,600 in the 15-74-year age group in February - April.

Takarékbank analyst Gergely Suppan projected an average gross wage increase of 5.4% for the whole year, which he said could translate to a 7% net increase as a result of the changes in the tax plan.

Consumption deferred in the past few years, the conversion of FX household loans into forint and households’ net financial assets rising to record levels could lead to household consumption becoming the engine for GDP growth in the coming years, he said.

Erste Bank senior analyst Gergely Ürmössy put gross wage growth this year at around 6%. Ürmössy, too, said household consumption could become the driving force of the economy this year.

Republished with permission of Hungary Matters, MTI’s daily newsletter.