Inflation eroding wage growth in Romania during July
Romania's wage growth and inflation rates have presented a complex landscape in recent years, with varying trends across different sectors.
According to the government forecasting body CNP, the public administration and education sectors have remained virtually flat compared to July 2024, while the health sector, which includes private medical services providers, posted an average 5.1% y/y advance. This growth may be attributed to the wages in the growing private sector within the health sector.
Conversely, institutions in the public administration, education, and healthcare sectors showed negative annual real wage growth rates in the three main budget areas in 2025. The manufacturing sector, on the other hand, showed positive wage growth, with the manufacturing of transport equipment and paper and paper products manufacturing posting robust rates of growth.
The average net wage dropped by 3.0% m/m and 2.4% y/y to RON 5,517 (EUR 1,088, +3.2% y/y) in July. However, the manufacturing sector's average net wage rose above average by 8.7% y/y, resulting in a positive growth rate of 0.7% y/y.
The inflationary shock from electricity market liberalisation, higher VAT rates, and excise duties will contribute to the gradual deterioration of households' purchasing power. Romanian households' purchasing power deteriorated in July due to a slower nominal advance (+5.2% y/y) and a sharp rise in inflation (7.68% y/y). Wages in the construction, IT, and HoReCa sectors have increased over the past year at rates inferior to headline inflation, eroding employees' purchasing power in these sectors.
The steepest wage advance, +28.5% y/y, was in the financial services sector, with an increase of +19.1% y/y in real terms, where the average net wage reached RON 7,340. As of July, wages are 15% above the 2019 average in real terms, but they were 67% higher when expressed in euros.
CNP expects the average wages in Romania to rise more slowly than inflation in 2024 and 2025. Amid this fragile economic context, wages in the private sector are expected to see slower nominal growth. Freezing public wages and pensions over two years (2025-2026) will have a negative impact, particularly on public sector employees and public pension recipients.
Even if inflation were to subside in the second half of 2026, the impact of double-digit inflation over the two years would have a tough impact on these groups. This forecast by CNP results in a gradual deterioration of the average real wages by 0.4% y/y in 2023 and 0.3% y/y in 2026.
In conclusion, while some sectors in Romania have experienced positive wage growth, the overall trend is one of slowing wage growth and deteriorating purchasing power due to inflation. The impact of these trends on various sectors of the economy and on different groups of employees will be significant and long-lasting.
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