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UPDATE 1-Hungarian wage growth eases in April

Published 06/19/2009, 03:40 AM
Updated 06/19/2009, 03:48 AM

* Gross wage growth eases to 3.5 pct from 4.3 pct

* Decline due to lower working days, pay adjustments

* Data may reassure cbank about CPI risks

(Updates with statistician, analyst comments)

BUDAPEST, June 19 (Reuters) - Hungarian wage growth eased across the board in April, data showed on Friday, due to the lower number of working days and higher employment in the public works programme, which dragged public sector wages down.

Gross average wages rose by an annual 3.5 percent in April after an increase of 4.3 percent in March, the Central Statistics Office (KSH) said.

In the public sector, wages dropped by an annual 0.9 percent after decreasing by 0.6 percent in March, while private sector wage growth eased to 5.3 percent from 6.3 percent.

"Compared to March the pace of wage growth is slower but this is largely due to the working-day effect," KSH statistician Erika Molnarfi said.

"In April, there were two fewer working days than last year, whereas the March headline figure was boosted by the same factor."

She said public sector wages declined due to changes in the accounting of a 13th month pay, now maximised at 15,000 forints a month, while there were 20,000 more people employed in the public works programme in April, which also dragged wages lower.

"In the private sector the slower pace of increase is largely due to the lower number of working days," Molnarfi said.

Ex-bonus private sector gross wages, a number usually watched closely by the central bank when setting interest rates, rose by 5.9 percent after a 6.5 percent increase in March.

"This (today's data) might soothe the nerves of the central bank by reassuring them that short-term inflation risk is lower despite higher-than-expected headline inflation readings. The recession seems to keep inflation in check, after all," said Gyorgy Barcza, analyst at K&H Bank.

Real wages in the first four months dropped 2.2 percent year-on-year.

Hungarians took home 122,916 forints ($608.5) on average in April.

(Reporting by Gergely Szakacs; editing by Chris Pizzey)

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