Romanian workers are getting an average real-terms pay rise that is one of the highest in Europe this year, but rising inflation will erode the rate of wage gains in 2018, according to a research by Willis Towers Watson summarizing approximately 13,250 sets of responses were received from companies across 139 countries worldwide.
Its Salary Budget Planning Report, a global study of wage levels conducted in March 2017, shows that Romania will see an average overall salary hike of 4.5% this year, against a forecast inflation rate of 1.2%, leaving a pay rise of 3.3% in real terms when taking inflation into account.
That adjusted rate is one of the highest in Europe and more than triple the EU average of 1%. Romania’s rate is unmatched by any Eastern European economy, including: Hungary (0.6%), Bulgaria (1.7%), Austria (0.6%), Czech Republic (0.6%), Croatia (1.4%), Poland (1.4%), Slovakia (1.1%), and Slovenia (0.8%).
But in 2018, a higher forecast Romanian inflation rate of 3% is set to eat into an average pay rise of 4.6%, leaving a rise of 1.6% in real terms, though that is still above the EU average of 0.9%.
Commenting on the overall wage outlook for Europe shown in the report, Paul Richards, Director of Data Services, Willis Towers Watson, said:
“In the European labour market, real terms wages are still growing in 2017, but rising inflation means those real wage increases are less generous overall than in 2016. For example 82% of countries in the EU28 will get pay increases this year above or roughly in line with the prior year increase. However when taking rising inflation into account, there are no countries with real wage increases above or in line with prior year increases. The average EU28 real terms pay increase is now 0.9%, which has dropped from 2.6% in 2016.
“In 2018 inflation will remain a factor and the wage picture will be quite mixed across Europe. While nearly all of the EU28 will get a pay rise in 2018, only 11 countries will see a rise that is higher than in 2017.”