Real net wage growth slowed down further to 2.2% y/y in April from 3.5% y/y in the month before, according to data published by the stat office on Wednesday. Net pay rose at a decelerating pace by 1.6% y/y, while CPI inflation deepened to 0.6% y/y. At the same time, gross wage growth came in at 1.8% y/y.
Public sector wages went up by 2.8% y/y partly due to the abolishment of some of the austerity measures related to the public servants pay in the beginning of the year. At the same time, private sector wage growth slowed down further to 1.1% y/y. This implies that Slovenian companies retained cost competitiveness, which should continue to underpin export growth. Still, we do not expect to see any tangible further improvements in cost competitiveness, considering that the public sector faces strong pressure to hike further wages after the years of austerity following the 2008-2009 economic crisis.