70% of economic growth in first three quarters of 2018, obtained by stocks increase. Foreign exchanges pulled down GDP by 1.6 percentage points

INS recalculated GDP in the third quarter and the first three quarters of the year. Here are the growth data for the Romanian economy, updated… Mai mult

Romanian Leu of 2019: Depreciation rate depends on budget credibility and seriousness

The estimates by economists of most important banks in Romania on the depreciation of the local currency for this year range between 4.73 and 4.77… Mai mult

Romania and energy: Position in European context

Final energy consumption of Romanian industry declined by about 75% between 1990 and 2016, compared to only 25% at the EU level, according to data… Mai mult

Crash signal in foreign trade – export coverage ratio has fallen to 2011 level. And we do not import robots

The trade deficit on November 2018 was EUR 1.567 billion, the second worst monthly performance registered last year. Worryingly, the growth rate of exports compared… Mai mult

Intense M&A activity in 2018 in Romania – Deloitte analysis

The Romanian mergers and acquisitions market reached nearly EUR 2 billion in 2018, according to a Deloitte Romania analysis based on public sources and transactions… Mai mult


Labour cost, nearly 14% higher than last year. Implications

de Marin Pana , 10.12.2018

Hourly labour costs grew by 13.91% in the third quarter of 2018 compared to the same period in 2017 (+1.53% compared to Q2 2018), according to INS data.

It is a slight decrease compared to the previous quarter but above the 12% threshold watched in the non-Eurozone area on the macroeconomic scoreboard centralized at Eurostat for the macroeconomic imbalance procedure.

More importantly, the level of 13.91% has replaced the level of only 7.28% from Q3 2015 in the calculation used in the past three years. That will lead to losing the compliance with this indicator (provisionally announced at 11.9% for Romania in 2017, when we achieved the performance to meet 13 of the 14 macro-stability criteria).

Here’s how the situation is in the past 12 quarters:


  • Evolution of hourly labour costs in the last 12 quarters (% compared to the same period of the previous year)
  • Quarter
  • Increase in the hourly labour cost
  • Quarter
  • Increase in the hourly labour cost
  • Quarter
  • Increase in the hourly labour cost


In order to see to what extent the increase in labour cost has been covered by the economic activity, we also present the evolution of labour productivity in the manufacturing industry, the one which can be measured with certainty and to which a correlation should be made in terms of wage increases in order to avoid inducing macroeconomic imbalances.


  • Labour productivity in manufacturing industry
  • Year
  • Labour productivity
  • Source: BNR statistic bulletin 6/2018, *average on first nine months


For 2017 and the first nine months of 2018, we can easily notice an evolution of the labour productivity close to the GDP growth rate.

Instead, last year the increase in labour costs was about two and a half times higher, and this year, although it relatively dropped, it was three and a half times higher (according to the provisional GDP data).

Without being the end of the world at the moment, not only the major decorrelation between the two indicators raises questions but also the expansion of the difference in the growth rhythm. In addition, precisely the public sector (where measuring the labour productivity is questionable) has taken an advance to the top, while the manufacturing industry has maintained around 10%, alongside hotels and restaurants.

This is how much the labour cost has increased in different sectors of the economy, classified according to international norms:


  • Quarterly indices of hourly labour cost in Q3 2018 (% compared to Q3 2017, adjusted to the number of working days
  • Economic activities                 Total labour cost
  • Health and social assistance
  • Education
  • IT&C
  • Construction
  • Manufacturing, construction and services
  • Water distribution, sanitation, waste management
  • Public administration and defence; social insurance
  • Other service activities
  • Real estate
  • Hotels and restaurants
  • Manufacturing industry
  • Professional, technical and scientific activities
  • Administrative and support services activity
  • Retail and wholesale trade
  • Transport and warehousing
  • Energy, water and gas production and supply
  • Arts, entertainment and recreation
  • Extractive industry


The structure of salary cost increases in the economy, with health and education on top positions in terms of labour cost increases, comes to remedy an older injustice but needs to be properly supported from a budgetary point of view.

Regarding the public administration, it is good that it has dropped to a more reasonable level, below the average, but its position above the manufacturing industry is not quite right.

If we look at the rest of the EU countries, we see that overruns of the 12% level of the average labour cost over the last three years are still only in Bulgaria and the Baltic countries. Which shows that we are dealing with an objective phenomenon, but the careful management of the growth rhythm will remain a medium-term problem.

The proportion of wages in the cost of products has already contributed to a more than six per cent advance in industrial production prices, which is seen in the competitiveness erosion, in a significant increase of the GDP deflator (which adjusts the nominal GDP to the real value) and will manifest in a quite durable way in the consumer prices.

Mergeți în homepage ›

Publicat la data de 10.12.2018

Lăsați un comentariu


Mugur Isarescu: "Ordinance weird thing" reduces monetary policy efficiency, which will not help Government

The National Bank of Romania (BNR) will convoke the National Committee for Macro-prudential Supervision, where the Ministry of Finance will be required to clarify the… Mai mult

World Bank lowered prospects on Romania's economic growth for 2019 and 2020

  Romania's economy will record an advance of 3.5% in 2019 and 3.1% in 2020, down one percentage point from June 2018 forecast, according to… Mai mult

State is borrowing at increasingly higher costs - government bond yield reached 5.33% per year

The benchmark government bond yield jumped above the 5% threshold on Thursday. The Ministry of Public Finance (MFP) attracted RON 300 million from banks on… Mai mult

Iasi - Tg.Mures highway disappeared from Large Infrastructure Operational Programme 2021-2027

The Ministry of European Funds has taken out Iasi-Tg. Mures highway project from the Large Infrastructure Operational Programme 2021-2027 and the Ministry of Transport already… Mai mult

Senate postpones discussions on DNA’s request on waiving immunity of Calin Popescu Tariceanu until February 2019

The Senate has decided that it will put to the vote the decision to waive Calin Popescu Tariceanu's immunity only in the spring session, that… Mai mult

Implementation of 5G technology, a multiplication effect in economy of EUR 4.7 billion - announces Sorin Grindeanu (ANCOM)

The National Authority for Management and Regulation in Communications (ANCOM) launched on Wednesday the National Strategy for the Implementation of 5G Technologies in Romania for… Mai mult

FIC: Amendments on Criminal Codes expose business environment to abuses from civil servants

Some of the amendments to the criminal codes will generate mistrust regarding Romanian state's ability to ensure the legality, stability and predictability of business relationships… Mai mult

European Semester / European Commission asks Romania to correct its medium-term structural deficit by 1% of GDP

Minister Eugen Teodorovici is pressured by the EU to reduce the budget deficit After finding that the Government has done nothing to adjust the deviation… Mai mult

Sovereign Fund gets legal base. Details announced by Minister Teodorovici

The Government adopted on Thursday the ordinance that provides for the general framework for the establishment of a Sovereign Fund. Later, after new talks with… Mai mult

Ford is looking for 1,700 employees to produce EcoSport SUV model

The representatives of Ford Craiova met on Wednesday with mayors of 30 localities from Dolj county in order to stimulate the attraction of 1,700 new… Mai mult

Development strategy / Government squeezes even investment money from its own companies: EUR 120 million from only two entities in energy field

Nuclearelectrica (SNN) and Romgaz (SNG) have calculated the additional dividends to be paid to the state after the Ministry of Finance (MFP) sent to the… Mai mult

DNA, officially: Senate President is suspected of having received a USD 800,000 bribe. Case file opened at a request from Austrian judicial authorities

The case file in which the DNA requested the waiving of the Senate President’s immunity was opened at the request of Austrian judicial authorities and… Mai mult

Illegal state aid / European Commission demands Romania to recover EUR 60 million from CE Hunedoara

Romania has to recover illegal state aid worth EUR 60 million granted to Compexul Energetic Hunedoara, announced the European Commission with a statement released on… Mai mult

Ministry of Finance planned loans of RON 4.74 billion in November. Costs are increasing

The Ministry of Public Finance (MFP) intends to borrow in November RON 4.74 billion, 1.4% more than in the previous month, according to the Ministry.… Mai mult