Real wages keep growing, but the pace starts to slow down

Today, we are analyzing the development of real wage growth. Most recently, Czechia and Slovakia published their real wage growth for the second quarter of 2024, and in both countries, the growth dynamics eased slightly compared to the beginning of the year. This is particularly important in the case of Czechia, where wage development was stressed as an important factor in decision-making by the central bank. The fact that real wage growth eased to 3.9% in 2Q24 from 5.0% in 1Q24 supports the monetary easing scenario so that the key policy rate is below 4% at the end of the year. As for other countries, real wage growth remains in double digits in Croatia, Hungary, Romania, and Serbia. In Poland, the recent increase in inflation, as well as lower growth dynamics of nominal wages, pushed real wage growth down to 6.0% year on year in July. Nevertheless, solid real wage growth is reflected in the private consumption development that remained a key driver of growth in the second quarter.