DATA SNAP: Hungarian January Real Wages Decline 6.4%YY -2-

Tue, Mar 20 2007, 08:27 GMT
http://www.djnewswires.com/eu

DATA SNAP: Hungarian January Real Wages Decline 6.4%YY -2-

Gross wages rose 7.1% in January from a year earlier versus a rise of 11.9% in December. Gross wages in the private sector increased 10.4% after a whopping rise of 15.5% in December. Gross wages grew 5.6% in the public sector in January versus an increase of 5.2% a month earlier.

The central bank said that it will scrutinize wage data, especially wage developments in the private sector, to see whether the government's fiscal austerity measures have boosted inflationary pressure.

Analysts said that January wage data are especially important for the central bank as previous months' figures have been distorted by tax changes. Higher personal income and other taxes coming into effect in 2007 may have prompted companies to pay wages and bonuses in the last months of 2006.

January wage data should be free from these distortions, they said.

Gross wages rose 10.8% in January in the industrial sector, which accounts for the lion's share of Hungary's economy, down somewhat from a rise of 11.3% in December. Gross wages in the manufacturing sector were up 11.4% in January versus a rise of 11.6% in December.

Gross monthly wages averaged 209,418 forints ($1,135) in January. They totaled HUF163,219 in the private sector and HUF329,670 in the public sector.

Net wages were up 0.9% in January as a result of a 3.2% wage increase in the private sector and a 0.5% decline in the public sector. In December, net wages rose 8.2%, with net wages rising 11.3% in the private sector and 2.3% in the public sector. Higher social security and other employment-related payments, that came into effect in September and January, continued to keep net wage growth under pressure, the KSH said.

The KSH added that the number of employees totaled 2.78 million in January, up 1.0% from a year earlier. Employment continued to fall in the public sector and rise in the private sector, a trend seen since March 2006. Public sector employment was down 3.4% at 753,400 and private sector employment was up 2.1% from a year earlier at 1.95 million.

The data exclude businesses with fewer than five employees.

Statistics office's Web site: http://www.ksh.hu

-By Edith Balazs, Dow Jones Newswires; +361-267-0622; edith.balazs@dowjones.com

(END) Dow Jones Newswires

March 20, 2007 04:27 ET (08:27 GMT)