The Hungarian Central Statistics Office (HCSO) has just published wage data for July, which highlights that wage outflows remained quite strong, with average gross wages increasing by 15.2% year-on-year. However, the annual figure was lower than both last month’s reading and our own expectations, as we had anticipated higher bonus payments. Regular gross revenue increased 15.6% year-on-year, accelerating from last month and outpacing the gross revenue growth rate in July.
This indicates that bonus payments were weaker than the previous year, which would not be surprising given the current state of the economy. At the same time, some companies may also have begun to incorporate one-time items (bonus payments) into employees’ base salaries (regular gross earnings). This theory is also supported by the fact that average wage growth accelerated to 16.3% year-on-year in July. In our opinion, this type of conversion of bonus payments to regular gross income is more likely to occur for people with lower incomes, hence the significant acceleration in the growth of the average salary.