Is the financial situation in Hungary precarious?
A Hungarian economic news website reported that Hungary is facing serious financial challenges due to a wage-price spiral that started in the fall of 2022 and is not expected to end soon. Additionally, the Hungarian News Agency mentioned that the average wages in the country had significantly increased in October.
A phenomenon of a continual increase in wages and prices, resulting in an upward spiral with no end. According to portfolio.hu, salary increments are insufficient to keep up with the skyrocketing prices.
This has resulted in a time of so-called wage-price spiral and intense inflation. The most recent information implies that the scenario will become even more drastic this year, as the enhancement in costs will lead to expanded wages and it will be difficult to break that harmful cycle.
The Hungarian economic news portal claims that the government’s tremendous least wage increment set off the spiral last year, before the April general elections.
According to their estimations, the purchasing power of wages has been descending for in any event two months in Hungary. Hence, genuine wages are at a 2020 level right now. The value may remain elevated this year, subsequently, organizations plan salary increments. In any case, the genuine wages will even now diminish by 2-3 percent in 2023.
Overall paychecks rose by 18.4 percent in October compared to the same month of the previous year.
According to the Central Statistical Office (KSH) on Wednesday, the average gross wage in Hungary had risen by 18.4 percent to 510,500 forints (EUR 1,270) on a yearly basis in October.
The average net wage amounting to 352,000 forints was 19.1 percent higher than the same period from the previous year, mainly due to the increase in minimum wages for skilled and unskilled workers and other wage hikes planned and additional.
The average monthly gross wage of full-time employees, not including Hungarians employed in fostered work programs, was 519,800 forints, and the average monthly net wage was 339,500 forints.
The average monthly gross wage of men and women had increased by 18.1 percent and 16.6 percent respectively to 552,500 forints and 457,700 forints. The non-profit sector experienced the highest percentage of wage growth at 28.5 percent to 493,800 forints.
Additionally, wages had grown by 16.2 percent to 445,500 forints in the central-budget operation sector, and by 14.3 percent in the business sector. KSH attributed the above-average wage growth in the non-profit sector to the transfer of several educational institutions from the central-budget sector.
For the period of January-October, those employed in the financial and insurance industry had the highest average monthly gross wage of 844,100 forints, while commercial accommodations and catering had the lowest of 316,700 forints.
Economic Development Minister Marton Nagy indicated that wages have increased more than double since 2010 when the government took power. Despite the inflation caused by sanctions, real wages have gone up by 4.3 percent in the first ten months of the year. Nagy also noted that the 16 percent minimum wage increase from January has indirectly or directly helped about 1.5-2 million jobholders.