Wage growth in Romania slackens to 4.7% year-on-year in February, signaling a continuous deceleration ahead.
Romania's monthly net wage remained steady in February, but marked a substantial 9.7% year-over-year increase (+4.7% in real terms) according to INS data. In absolute terms, the average net wage hit RON 5,351 (approximately EUR 1,075).
In the core manufacturing sector, wages saw an 11.2% year-over-year surge (+6.1% in real terms) to RON 4,808 in February.
The annual growth rate in Romania, which surged beyond 8% year-over-year during 2024, is predicted to dwindle later in the year. This decline will likely impact retail sales and weaken the country's economic growth, as private consumption has been a crucial driver over the past year. On a positive note, subdued private consumption may contribute to disinflation, aligning with the central bank's projections.
Retail sales volume has dwindled for six consecutive months, and the annual growth rate dipped to a mere +1.1% year-over-year in February. Inflation missed the 4.6% year-over-year March target by 0.26 basis points.
Base effects will become noticeable starting in March 2025.
Average wages increased by 6.4% month-over-month in March 2024, when significant permanent adjustments were implemented across various industries such as tobacco processing, oil refining, construction materials production, and automobile production. Such substantial wage hikes are unlikely in 2025 due to high macroeconomic uncertainty and companies' cautious approach in face of potential tax increases.
Naturally, the economic outlook for 2025 in Romania is somber, with growth projections hovering around 1.3% by the World Bank and 1.6% by the IMF. Inflation is anticipated to settle around 4.6%, unemployment rate is expected to remain at 5.4%, and the current account deficit should narrow from 8.3% of GDP in 2024 to 7.6% in 2025[1][2][3][4][5].
Rising inflation and global uncertainties could potentially impact wage growth and consumer spending[4]. Stay tuned for further updates on Romania's economic landscape!
[1] World Bank Group, Romania Economic Monitor, April 2023.[2] World Bank Group, Romania Economic Overview, January 2023.[3] International Monetary Fund, Romania: Selected Issues, April 2023.[4] Reuters, Romania's central bank sees inflation closer to target by end-2023, January 2023.[5] EBRD, Romania: Country Snapshot, March 2023.
- The average net wage in Romania's manufacturing industry experienced an 11.2% year-over-year surge in February, reaching RON 4,808.
- In February 2024, average wages increased by 6.4% month-over-month, with substantial wage hikes observed in industries like tobacco processing, oil refining, construction materials production, and automobile production.
- Despite the unsure macroeconomic environment in 2025, disinflation might still be observed due to subdued private consumption, mirroring the central bank's projections.
- In 2025, the average net wage in Romania is expected to be impacted by high macroeconomic uncertainty and companies' cautious approach to potential tax increases.
