Weaker Forint may counterbalance steep wage hikes
April 19th, 2019An analyst writing for the leading online business news site believes that growing productivity and the weakening Forint may help Hungary avoid a ‘wage hike catastrophe’.
On Portfolio, economic analyst Károly Beke comments on fears that the steep wage growth may trigger job cuts (see BudaPost April 1). Beke recalls that Hungarian wages have been growing among the fastest in Europe. In his view, this does not overstrain most companies, and is unlikely to trigger large scale job cuts and closures. Beke points out that due to cuts in employers’ benefits, companies save some of the costs of higher salaries. In addition, productivity in Hungarian companies has been on the rise since 2016, which also compensates for higher salaries, Beke adds. He goes on to note that the weakening of the Forint against the Euro has also helped companies pay higher salaries without risks to their profitability.