Representatives of employers and unions associations signed an agreement on Monday on a close to 4pc minimum wage rise from February 1.

The agreement, reached after a deadlock lasting weeks and dragging into the new year, will raise the gross monthly minimum wage from HUF 161,000 to HUF 167,400 for unskilled labourers and from HUF 210,600 to HUF 219,000 for skilled workers.

The agreement stipulates a further mid-year rise in the minimum wage, to HUF 169,000 for unskilled labourers and HUF 221,100 for skilled workers, if the payroll tax is reduced another two percentage points to 13.5pc, state secretary for employment policy Sandor Bodo said.

The minimum wage in Hungary has risen sharply over the past several years, supported by an agreement earlier reached with the government and employers pairing the annual increases with payroll tax cuts. The statutory minimum wage was raised by 8pc in 2019 and 8pc in 2020.

The agreement on Monday was signed by all three big employers associations, MGYOSZ, Afeosz-Coop and VOSZ, and two of the three largest associations representing workers: unions association Liga and workers council association MOSZ. Unions association MASZSZ did not sign the agreement, arguing that the scale of the wage rise could not keep up with increasing food prices.