The average gross monthly salary in Czechia rose by 4.4 percent year-on-year in the second quarter of 2022 to CZK 40,086, according to the data released by the Czech Statistics Agency on Monday.
In real terms, taking into account inflation, the real wage dropped by 9.8 percent in the same period. It is the third quarter in a row that it has been falling.
Central Europe’s economies are bracing for a rough second half of the year, which could even mean a fall into recession for some, caused by double-digit inflation rates that are hitting consumer demand and taking away a key driver of the region’s post-pandemic recovery.
With inflation in the Czech Republic averaging 15.8% in the second quarter, wages were down by real 9.8% from a year before. The nominal wage rose 4.4%.
“It was clear that wage growth at such a pace would not be enough (to keep up with inflation),” Raiffeisen analysts said.
The real wage drop was slightly deeper than a Reuters poll forecast of a 9.5% decline but less than a central bank forecast of a 13.1% fall.
The central bank, which held interest rates unchanged last month but has not fully shut the door on further hikes, sees real wages falling by more than 12% in all of 2022.
In general, two-thirds of employees in Czechia earn less than the average wage. The median wage, a midway between the highest and the lowest levels, increased by 5.3 percent year on year to CZK 34,111.
Retail sales growth slowed in July to 4.3% year-on-year, data on Monday showed, adding to signs the cost of living crisis was catching up with central Europe’s economies despite rising nominal wages.
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