Estonian wage growth continues to accelerate in third quarter

By bne IntelliNews November 26, 2015

Estonia’s average monthly gross wage grew 6.9% y/y in Q3 to reach €1,045, data from Statistics Estonia showed on November 26. 

The figure marks a pick up in what was an already quick pace of growth. Wages expanded 5.8% in Q2 and 5% in the third quarter of last year. Real wages increased even faster, at 7.5%, due to ongoing deflation, which came in at 0.6% y/y in October. Real wages have now increased for seventeen quarters in succession.

While wages and deflation have been helping support economic growth by pushing conumption, the tightening labour market is worrying analysts. Concern that over its effect on sustainable growth and investment only grew earlier this month when it was reported that the economy managed an expansion of just 0.5% y/y in the third quarter. The slowdown was marked by buckling manufacturing and trade. 

Private consumption is forecast to decelerate through to 2017, according to the European Commission. The EU executive projects GDP growth of 1.9% in 2015 and 2.6% in 2016.

Estonian wages may well continue growth, however, as demographic challenges dent the working age population. There are other factors that will also push the trend in the medium term, note analysts at Swedbank.

"Wage growth will also be fast next year as the lack of suitable labour remains a concern," they write. "An agreed 10% increase in the minimum wage in 2016 will also have an impact. The growth of wages in real terms will slow in 2016 compared with 2015 as prices will start growing and labour taxes will be lowered less than this year."

 

Related Articles

Latvia issues permits to new gas infrastructure holding

The Latvian Public Utilities Commission (SPRK) announced on January 5 that it has issued licences to Conexus Baltic Grid for the transmission and storage of gas. Conexus Baltic Grid will control ... more

Latvijas Gaze agrees to set up spin-off company to operate gas grid and storage

A shareholders' meeting at Latvijas Gaze (LG) decided on December 22 to set up a company that will be used to spin off the country's gas pipelines and storage facilities. The creation of Conexus ... more

Latvia fines Swedbank for failings in anti money laundering measures

The Latvian branch of the Swedish banking group Swedbank said on November 23 it will implement measures to curb money laundering. The pledge follows an audit and a fine of €1.36mn from the ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss