K&H Analyst Commentary: Hungarian wages continue to slow down

Wage dynamics have been slowing down continuously since the beginning of last year, and the data just released fit into this trend, according to which gross average wages increased by 8.5 percent in March and net wages by 8.4 percent on an annual basis – assessed the earnings statistics published on Tuesday by Dávid Németh, the chief analyst at K&H.

According to him, the main question is whether wage dynamics will continue in the coming months or stabilize somewhere around the current level. “From this perspective, it is important that several sectors are performing poorly for the time being, such as industry. Therefore, we do not expect major wage pressure. Based on the current outlook, the annual growth rate in the coming months may be around 8 percent,” said Dávid Németh.

He added: “As a result, net average wages are expected to grow by 8.3-8.4 percent annually, with an average annual inflation rate of 4.5 percent. As a result, we expect net real wage growth of around 3.8 percent. Within GDP, this means that household consumption can continue to grow by around 4 percent annually.”