The average wage in the Czech Republic increased by 7.9 percent year-on-year to 43,412 crowns in the fourth quarter of last year. However, after accounting for inflation, which reached 15.7 percent in the same period, wages decreased by 6.7 percent in real terms. It fell for the fifth quarter in a row. This follows from data published by the Czech Statistical Office (ČSÚ).
The median, i.e. the middle value of wages, increased by nine percent year-on-year to 37,463 crowns in the 4th quarter. For men, it was 40,232 crowns, for women 34,554 crowns. Eighty percent of employees received wages between 18,666 crowns and 70,514 crowns per month.
In nominal terms, wages increased in each quarter of last year in a year-on-year comparison. In the first quarter it was by 7.3 percent, in the second by 4.4 percent and in the third by 6.2 percent. But in real terms, it fell in every quarter of last year. It was sequentially by 3.5 percent in the first quarter, 9.8 percent in the second and 9.7 percent in the third.
In the last quarter of last year, wages grew the most in the production and distribution of electricity, gas, heat and air conditioning. It was by almost 15 percent. Conversely, wages in education fell by 0.3 percent. "In health and social care, the increase was only 4.5 percent," the statisticians said.
For the entire last year, the average salary reached 40,353 crowns. In a year-on-year comparison, it was 2,450 crowns more, i.e. 6.5 percent. However, consumer prices increased by 15.1 percent last year, so wages decreased by 7.5 percent in real terms.
According to analysts, the decline in real wages will continue this year, but at a slower pace. Considering the development of wages, according to them, there is also no risk of a wage inflationary spiral, which would force the Czech National Bank to further increase the base interest rate.
“For the next quarters, we expect very similar wage developments to the fourth quarter of 2022. This means that inflation will continue to have the upper hand against nominal wage growth. It will probably stop falling in real terms in the second half of the year, more as a result of the drop in inflation than the acceleration of wages. However, we will return to visible growth in real wages only next year," says UniCredit Bank Chief Economist Pavel Sobíšek.
Published by team CzechTrade Israel