Wage growth will continue to fuel inflation in the euro zone even after shocks linked to the Covid-19 pandemic and the war in Ukraine have passed, the chief economist of the European Central Bank estimated on Friday.
“Even after energy and pandemic factors fade” from inflationary dynamics, “rising wages will be the main driver of price increases for years to come,” writes Philip Lane in a blog post on the website of the ECB.
While inflation topped the 10% mark this fall in the region, the ECB fears a price-wage spiral could be unleashed, potentially derailing its scenario of a gradual return of inflation towards its 2% target. . However, this phenomenon is not currently observed, as the latest contract negotiations have generally resulted in an average salary increase of 3.8% for 2022 and 3.5% for 2023, notes Philip Lane.
“Update process”
In Germany, about 4 million employees in the industrial sector, in electronics and metallurgy, obtained this Friday a salary increase of 8.5% in two years. These increases are certainly perceived as “above normal”, but they “largely reflect the recovery process after the fall in real wages that has occurred since mid-2021”, when energy prices and prices of raw materials have triggered world inflation and eroded purchases. Energy.
Wages will continue to rise in the future but this should not be interpreted as “a permanent change in nominal wage dynamics”, according to Philip Lane. Une fois la phase de rattrapage salarial passedée, “on peut s’attendre à ce que les salaires nominaux progressent au rythme corresponding à la somme de la croissance de la productivité du travail et de l’objectif d’inflation de 2%”, he concluded -The.
Source: BFM TV
