Czech Prime Minister Bohuslav Sobotka said on September 11 that public sector wages are to rise by a minimum of 10% from November 1.

With the general election due in October, government politicians have come under tremendous pressure to bow to union demands to provide greater rewards to teachers and other state workers given the run of unexpectedly strong economic growth currently being enjoyed by Czechia and the country’s ultra-low unemployment of 4.0% - the lowest in the EU - which has led to the private sector trying to poach more workers from the public sector to fill vacancies.

Czech wages accelerated at their fastest pace in a decade in the second quarter.

“Teachers’ wages will grow by 15%, the rest of public sector employees’ [wages] by 10%,” Sobotka, the Social Democrat who leads the coalition government, tweeted.

In the opinion polls, the Social Democrats (CSSD) trail junior coalition partner ANO by a double-digit margin as the parties prepare to begin campaigning in earnest for the October 20-21 election. That’s despite ANO leader Andrej Babis facing potential difficulties from a fraud investigation for which parliamentary MPs voted to remove his immunity from prosecution.

All three coalition parties - the third and smallest member being the Christian Democrats (KDU-CSL) - support the public sector pay hike although there is some disagreement over how to pay for it without wrecking plans for the 2018 budget. The draft budget currently foresees a deficit of CZK50bn (€1.9bn).

On September 10, the finance ministry upped its forecast for 2018 GDP growth to 3.1% from 2.9%.