Real net wage growth slowed down to 1.2% y/y in June, registering its lowest level since November last year, data published by the stat office showed on Tuesday. The biggest contribution to the deceleration came from CPI, which turned to growth. Moreover, both gross and net pay rose at easing pace. Considering the subdued growth of real wages and employment, we do not expect to see significant pick-up of household consumption in the coming months.
The deceleration of net wage growth came on the back of private sector wages, which rose by 0.9% y/y compared to 1.8% y/y in the month before. This partly reflected companies’ efforts to retain cost competitiveness. At the same time, the rise of public wages remained noticeably higher as it came in at 2.8% y/y, aided by the abolishment of some austerity measures by the government. In regards to the breakdown by sectors, the biggest wage growth was seen in mining and utilities. At the same time, the agriculture, transport, ICT and financial sectors registered decline in the average pay.