BUDAPEST: Hungary’s average gross earnings growth accelerated in November 2016. The earnings rose 8.2 percent year-on-year, as compared with October’s growth of 5.4 percent. The reaction of the National Bank of Hungary on the rising inflation, and particularly on the surge in wage pressure will be focused on, noted KBC Market Research in a research report.
In 2016, lack of labor force in Hungary’s economy and the lowered tax wedge kept net real salary growth above 7 percent. Also, wage growth is expected to accelerate higher in 2017, according to KBC Market Research.
Taking the Council’s latest statements into account, the National Bank of Hungary might underline that inflation might return gradually to the 3 percent target till the end of 2018 as the inflation expectations are still anchored, added KBC Market Research.
Moreover, the ECB stated on Thursday that it does not intend to alter its monetary policy in spite of jumping inflation. This statement also underpins the Hungarian central bank’s loose monetary policy. The NBH might still intend to avert a huge HUF appreciation and hence it might not move towards tightening monetary policy before the ECB does it, stated KBC Market Research.
