Wage growth in the Hungarian economy in the private sector continued to accelerate. However, overall gross average wage growth slowed to 16.7% yoy in November from 18.1% in October. This indicates that the labor market remains tight even as the economy slows.
Inflation has not yet peaked in certain countries, such as Hungary, where annual inflation was 24.5% in December. However, Central European central banks have finished or are trying to finish the tightening of policies after sharp rate hikes to combat inflation.
In Hungary, private sector wage growth continued to gain strength, rising to 18.7% from 16.8% in September and 18.2% in October. Government and employers agreed to a 16% increase in the minimum wage for 2023; this will affect salary decisions as the year begins.
While this year’s wage growth will be 15%, overall wage growth for 2022 will likely exceed 17.5%. However, if there are interim salary increases like last year, this may be even higher.
According to the Central Bureau of Statistics (KSH), the increase in the minimum wage last year and already anticipated wage increases and complementary increases contributed to the wage increase in November 2022.
The central bank felt less pressure after data released last week revealed that wages in the Polish business sector rose less than expected in December, maintaining double-digit gains but showing the second slowest growth rate in 2022.
Japan lowers its economic outlook
For the first time in 11 months, Japan lowered its outlook for the global economy in January as COVID-19 infections in China and slowing demand for technology and semiconductors hit exports, particularly to Asia.
The world’s third largest economy should improve in the future. Still, Japan should pay close attention to the impact of China’s spreading diseases as a result of China’s removal of strict pandemic limits, according to the report. The most recent Cabinet Office assessment states that “the economy is recovering moderately, but some weakness has recently been noted”.
For the first time in three months, the authorities lowered their view on imports and their assessment of exports for the first time since November 2011. According to the January report, exports and imports have “weakened recently” compared to the previous estimate of “almost flat” from the previous month.
Amid monetary tightening, inflation, and changes in financial markets, the government also remained wary of the potential negative effects of the global economic downturn.
Meanwhile, the Cabinet Office confirmed its estimate of domestic demand in Japan, stating in the latest report that private consumption was “growing modestly.”
However, the government stood by its December assessment that the recovery in industrial production was slowing.
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