Commission to release key macro fcasts for Hungary this week

The Central Statistics Office (KSH) is to publish vital events statistics on Wednesday and wage numbers on Thursday. According to Nov12 data, Hungary’s average gross wage was HUF 238,283, up 5.4% year on year. In net terms this meant only a 3.2% increase, which - at a 5.2% CPI - led to an almost 2% net real wage decline. The number of employees at companies employing at least five people decreased by 46,000 yr/yr in the private sector.

Detailed January budget figures will be released on Thursday. According to the prelim data, Hungary posted a HUF 2.5 bn shortfall, which compares with a HUF 107 bn surplus in the first month of 2012. The gap was the result of a sizeable deficit in the central state budget that was offset by massive surpluses recorded at social security funds and extra-budgetary funds.

The European Commission is going to release its latest estimates for its member states on Friday. In November, the EU executive projected 2.9% of GDP budget deficit for Hungary for 2013, saying this could be reached only if the cabinet does not spend the sizeable budget reserves.

Based on the EC’s Nov report it seems that the government’s efforts to convince Brussels of the success of fiscal measures paid off, because the Commission too forecasts the shortfall to come in below the EU’s 3.0% of GDP ceiling this year. The problem is that the 2014 estimate is once again for a gap of over that level.

“The economy is characterised by weak potential growth, partly caused by policy uncertainty and increasingly distortionary taxes, most notably very high extra burdens on the financial sector," the Commission said.

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• deficit,
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• commission,
• wage,
• excessive deficit procedure