The June-August figure covering unemployment between the age of 15 and 74 was down from 4.9% in the same period a year earlier. In absolute terms, there were 195,500 unemployed in Hungary in June-August, 2,100 more than in May-July and 31,600 less than in the same period a year earlier.

At the same time, the employment rate rose by 1.5 percentage points to 68.6%, with altogether 4,444,000 employed between the age of 15 and 64 at the end of August.

The Economy Ministry said in a statement that the employment figure had reached a new record high, and 735,000 more people had jobs than in 2010. At that point, the jobless rate stood at 11.5% and now it has fallen to 4.2%, the lowest in 27 years, the statement said.

The ministry attributed the positive developments to its six-year wage deal with employers and unions, its tax-reduction programme and measures that have stimulated people’s desire to work while incentivising them to remain in the country rather than travel abroad.

The tight labour market could help sustain the rate of growth in real wages, though at the same time, peak of employment at the current level of qualifications of the workforce is about to be reached, analysts told MTI.

Gergely Ürmössy of Erste Bank, noting that the employment rate had improved while the jobless rate had stagnated, said that a tight labour market could help maintain real growth in wages, in turn boosting GDP growth, through rising demand could accelerate inflation over time.

András Horváth of Takarékbank said the slowing of the expansion in employment indicated that there are fewer and fewer trained people ready to enter the labour market, and that peak employment was about to be reached.

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