Oct 27, 2016

Hungary's unemployment rate continues to fall

Hungary's unemployment rate could fall close to 4.6 percent by the end of this year

Hungary’s unemployment rate continues to fall, the Central Statistical Office (KSH) said on Thursday.

The rolling average three-month jobless rate reached 4.9 percent in July-September, which covers unemployment among 15 to 74-year-olds, and was level with that in June-August but fell from 6.4 percent in the same period a year earlier.

In absolute terms, there were 226,500 unemployed in Hungary in July-September, 600 less than in June-August and down by 66,200 from the same period a year earlier.

MTI reports that analysts insist falling unemployment has a positive effect on economic growth in the short term through growing wages, but labor shortages could become an impediment to growth in the medium term. Unemployment could fall close to 4.6 percent by the end of this year, they added.

ING Bank chief analyst Péter Virovácz noted that the number of job-seekers was now practically level with the number of fostered workers. He said the labor shortage is likely to worsen in the coming years, as some 8,000 jobs are added in the automotive and related industries alone in 2017-2018. Big companies could leech labor from SMEs, causing the productivity gap between big and small companies to widen, he warned.

Takarekbank analyst Gergely Suppán said the data shows new jobs were created in the private sector and that the number of Hungarians working abroad was down by 1,000. He put the full-year jobless rate at 5.3 percent.

Péter Cseresnyés, state secretary in charge of jobs at the Ministry of National Economy, welcomed the figures and said government measures such as the job protection scheme, were behind the improvement. He noted that youth unemployment data also show improvement, keeping the jobless rate in this age group below 13 percent, compared to its rate of 30 percent in 2010.