Budapest  -  Hungary's gross average wages grew by 13.4 per cent year-on-year in February after a January slowdown, the Central Statistical Office (KSH) said Thursday, raising expectations of further interest rate hikes by the central bank.

The KSH said that private sector wage growth drove the figures upward, providing a massive turn around from a 1.5 per cent year-on-year drop in gross wages in January.

While the figures were distorted by the payout of yearly bonuses, analysts said that Hungary's central bank (MNB) would now be more likely to hike interest rates again despite an easing of inflation and the recent strengthening of the Hungarian forint.

"Previous comments from the MNB highlighted the importance of this year's wage data in shaping monetary policy and current data point to more rate hikes rather than less," Gyorgy Barcza, senior economist at Hungary's K&H Bank said in a note.

"In light of this a further 50 basis point rate hike to 8.5 per cent could still be needed, despite the forint's recovery easing some of the risks about inflation," he continued.

The central bank has been battling against high inflation, brought about largely by economic reforms aimed at cutting Hungary's huge budget deficit.

Inflation peaked at 9 per cent early in 2007 but has been slowly coming down since. Annual inflation slowed to 6.7 per cent in March from 6.9 per cent the previous month.

The MNB hiked the base interest rate by 50 basis points to 8 per cent in March. (dpa)