Macro Monitor – February 2024


At its February meeting, the Monetary Council of the central bank continued to cut both the policy rate and the base rate, as it had done in the previous month. As a result, the base rate (and the policy rate) in Hungary is currently at 9.00%, after a 100 basis point cut.

On an annual basis, turnover of retail stores fell by 1.0% in December on a raw basis and by 0.2% on a calendar-adjusted basis. Within this, sales decreased by 1.3% in specialised and non-specialised food retailing and by 3.0% in non-food retailing. The turnover volume of petrol stations increased by 3.8% year on year. In 2023, the volume of retail sales was 7.9% lower for the entire year. In the coming months, consumption growth could resume on an annual basis as real wages rise and the high volume base for fuel builds up.

Measured up to January 2024, the value of the SZIGMA CI indicator, which provides a snapshot of the current state of the Hungarian economy, improved slightly compared to the previous month, but the Hungarian economy was still operating below its historical trend value.

The other indicator, SZIGMA LEAD, a short-term forward-looking indicator for the future of the Hungarian economy, is now forecast to have stepped on a rather decelerating, sideways moving and stagnant path. In the past few months, it has tended to follow a steeply downward path, and this steep curve has been reduced to a sideways one.

In January 2024, consumer prices rose by 3.8% on an annual average basis.

In December average gross earnings were HUF 655,600

In December, average gross earnings in the national economy were HUF 655,600, up 16.4% compared to the same period last year. The highest average gross earnings were recorded in the competitive sector, at HUF 669,700. The wage dynamics of the month were strongly influenced by the increase in the minimum wage (15%) and the guaranteed minimum wage (10%), which came into force in December. Median gross earnings were HUF 496,100, 16.0% higher than a year earlier. The increase shows that some companies have not only increased the wages of workers on the minimum wage and guaranteed minimum wage, but have also made significant wage adjustments for other employees to avoid wage compression. Taking benefits into account, average net earnings reached HUF 451,300, 16.3% higher than in December 2022. Real earnings increased by 10.3%, while consumer prices rose by 5.5%.

For 2023 as a whole, average gross earnings were HUF 571,200, while average net earnings were HUF 379,800, both 14.2% higher than in 2022. Real earnings fell by 2.9%, while consumer prices rose by 17.6% year on year.

In 2024, we expect real wages to continue to rise, in line with the upward trend that has started in recent months. Nominal wage increases may be somewhat lower, as price changes seem to be stabilising this year, which reduces the bargaining power of employees somewhat. At the same time, the changing wage structure in companies and sectors due to the increase in the minimum wage and guaranteed minimum wage may also be an important factor in wage negotiations at the beginning of the year.

• The SZIGMA indicator system

The SZIGMA (abbreviation of the Hungarian name “Századvég Index a Gazdasági Momentum Alakulásáról”, in English: Századvég Index of the Development of Economic Momentum) is a simultaneous and preliminary indicator system developed by Századvég for the Hungarian economy.

It is crucial for economic policymakers and analysts to have an accurate picture of the state of the economy, but statistical data are often available with considerable delays. In contrast, the SZIGMA indicators provide information on the economic cycle and the business cycle within 30 days of the reference month, on a monthly basis.

The indicator system consists of two indicators, the SIGMA CI, which summarises the current state of the economy, i.e. information extracted from simultaneous variables, and the SIGMA LEAD, which provides preliminary information on the expected economic trajectory. A positive CI index means that economic growth is above the historical trend, and a negative CI index means that growth is below the historical trend. The SIGMA LEAD indicator provides a short-term forecast for a 9-month period. If the SIGMA LEAD indicator is positive, growth is expected to be above trend in 9 months’ time (i.e. three quarters of a year later), while if it is negative, growth is expected to be below trend in the near future.