“In the whole of 2022, inflation reached 15.1 percent and nominal wage growth was 6.5 percent. So, in real terms, wages have decreased by 7.5 percent,” commented Jitka Erhartová, head of the CZSO’s labor statistics department.
The median, i.e. the middle value of wages, was CZK 37,463 in the last quarter of last year, which increased by exactly nine percent year-on-year. For men, the median reached 40,232 CZK, for women 34,554 CZK. “Eighty percent of employees received a salary between CZK 18,666 and CZK 70,514,” added the statisticians.
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. On the contrary, wages in education fell by 0.3 percent. “The increase in health and social care was only 4.5 percent,” the CZSO said.
For the whole of 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.
Economists expect an improvement only in the second half of the year
According to Pavel Sobíšek, Chief Economist of UniCredit Bank, the wage development in the following quarters will be similar to the last quarter of 2022. “This means that inflation will continue to have the upper hand against nominal wage growth. They will probably stop falling in real terms in the second half of the year, more as a result of the fall in inflation than the acceleration of wages. However, we will return to visible real wage growth only next year,” said Sobíšek.
Radomír Jáč, chief economist of Generali Investments, sees it similarly. “As inflation will decrease over the course of the year and will already be below 10 percent in the second half of 2023, the decline in real wages should only continue in the first half of this year, while the second half of the year should already be marked by a recovery in year-on-year growth average real wages,” he stated.
Prices rose more in the Czech Republic than in the EU
Finance
