HomeEuropeEurozone wages to pick up in 2023: ECB survey

Eurozone wages to pick up in 2023: ECB survey

FRANKFURT – Eurozone workers may soon get some reprieve from the massive income squeeze as wages are seen picking up by 4 percent or more in 2023, according to an ECB survey among non-financial companies published Friday.

“Wage pressures continued to build and were increasingly becoming an additional cost concern for many firms,” the ECB said, after talking to 69 leading non-financial companies between 26 September and 6 October.

Wage growth has been “contained or modest” in 2022 as they were still largely determined by agreements concluded in 2021 or earlier and since employees were given temporary payments to help them deal with the higher cost of living.

But as sky-high inflation levels persist, more and more companies expect wage agreements to lock in permanent increases.

“Among [the companies that] gave quantitative indications of their expectations for wage growth, a large majority expected increases of 4% or higher (and in many cases substantially higher) as likely to take effect in 2023,” the ECB said.

This would still imply a loss in purchasing power next year under the ECB’s projections, albeit a much smaller one than this year. The bank currently expects inflation to average 5.5 percent in 2023.

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