Friday, March 07, 2008

Czech Wages and Salaries Q4 2007

Czech real wage growth slowed the most in two years in the last quarter of 2007 as inflation accelerated. The average monthly paycheck rose 1.9 percent when adjusted for inflation, compared with growth of a revised 4.9 percent for the preceding three-month period, the Prague-based statistical office said today. The average gross monthly salary advanced 6.8 percent to 23,435 koruna ($1,435). For whole year 2007, real wages advanced 4.4 percent, the most in four years.

The average inflation rate rose to 4.8 percent in the fourth quarter from 2.5 percent in the third, eliminating most of the nominal wage increase negotiated by unions and their employers. Policy makers at the central bank have said the inflation surge is only temporary and have urged against any reopening of wage talks in an attempt to prevent the inflation rate from rising.

In the private sector the monthly paycheck was 6.7 percent higher at 23,484 koruna. When adjusted for price growth in during the year, wages grew 1.8 percent, the office said.

State-employee salaries grew 7.1 percent in October through December from a year earlier to 23,259 koruna, translating into a 2.2 percent real advance.

The central bank indicated last month it may begin to bring down what are still the European Union's lowest rates as early as later this year, citing the strong koruna, faltering economic growth and the fading effect of cost and administrative shocks on inflation.

At the same time, policy makers have said they are ready to resume lifting borrowing costs to prevent inflation and a scarce labor force from sparking excessive wage growth.

Offering us one possible indicator of what may be to come Toyota Peugeot Citroen Automobile, a Czech car venture formed by automakers Toyota Motor Corp. and PSA Peugeot Citroen, have said this week that wages will increase by 7 percent with effect from from April 1.

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