Net wage in Romania moves up in November to catch up with inflation
The average net wage in Romania rose by 2.8% m/m in November to RON3,645 (€736.5) in one of the highest monthly increases over the past couple of years.
The advance, even if it seems to reflect volatile elements in November, is likely to further be encouraged by the rising inflation that has eroded households’ real incomes.
In real terms, the average net wage in November was 0.9% smaller than it was in the same month of 2020. It was the third month in a row when the net wage posted a negative real annual change.
The deterioration was prompted by the sharp rise in consumer prices, as the headline inflation doubled from 3.9% y/y in June to 7.8%-7.9% y/y in October-November.
The volatile activity in some industries will generate more ample variations in the employees’ incomes from a month to another until the production chains return to the pre-crisis smooth functioning.
In November, for instance, the wages in automobile production increased by 19% m/m after subdued activity (hence wages) in the previous months.
Overall, however, the pressures for pushing up the nominal wages in order to keep pace with the inflation and energy bills is likely to tighten.
Consumers’ weaker confidence has already surfaced in the retail sales figures: the seasonally adjusted sales of non-food items contracted by 5% from April to November.
Since 2018, economy has carried risk of severe balance of payments crisis. For the removal of that risk, the central bank’s net in and off-balance sheet FX position should at least turn positive.
Decline of 6.5% y/y is second worst in EU.
Retail sales rose by 0.9% m/m in October, recouping the losses incurred over the previous three months.
Czech retail sales decreased by 1.4% year on year and increased by 0.6% month on month in October, in the softest monthly drop in a year and a half. The drop in sales eased compared to the 4% y/y drop in September and the 2.8% y/y drop in August.
Despite lapse in demand, firms said to retain positive attitude on 12-month outlook for activity, which remained historically elevated. Inflationary pressures continued to retreat.
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