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Wednesday, September 19, 2007

Hungary Wages and Employment July 2007

The latest wages and employment report is now out from KSH. Real wages in Hungary dropped by 5.2% year on year in July when compared with the harmonised CPI, but this was a slight improvement over a 5.3% decline registered in June. What is obvious is that there has been a severe process of wage deflation in Hungary since the start of this year, although the pace is now slowing somewhat, with he sharpest fall in real wages being registered in February (-9%).

Here is the relevant chart:

Public sector gross wages have maintained a slightly higher rate of increase than last month (9.3% y/y up from 8.6% y/y last month) as expected due to a jump in bonus payments. Private sector gross average wages were up to by 10.8% y/y slightly under 11.4% y/y last month.

Despite the ongoing drop in real wages, employment has remained stubbornly stationary all this year, as the following chart illustrates.

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