Nominal gross wage growth slowed to 1.1%y/y in June from a revised 2.9% (2.5% previously) in May. Net wage growth slowed to 0.9% from 2.1%. Real net wages fell by 2.2% in the first half of 2009 according to the Central Statistical Office (KSH). Our view June wage data lend support to our view that consumer demand in Hungary will remain subdued in the foreseeable future. Negative wage and employment growth weigh on consumer sentiment and the necessity to maintain a tight budget means that the government will have very little if any room to ease the fiscal burden in 2010. Hungary's only realistic chance of economic recovery is based on the hope that the intial signs of improvement in Germany will lead to growing Hungarian exports in six to nine months time.