Labour tends to zero in terms of contribution to potential GDP. When employment rate increases but does not converge

The employment rate of Romanian population aged between 20 and 64 years was 68.8% last year, according to data released by Eurostat. This figure was… Mai mult

Convergence of wages versus price convergence

The living standard in Romania increased significantly due to an accelerated wage convergence compared to the EU average and the stagnation in price convergence toward… Mai mult

BNR raises inflation forecast for 2019 to 2.9%. Among risks: “unpredictably” administered prices

The National Bank of Romania (BNR) has maintained the inflation forecast for the end of 2018 at 3.5% but has raised the forecast for 2019… Mai mult

Serious problem of wealth distribution in society: How Romanians came to having lowest median income in EU

Eurostat has published the most recent data of EU member states on median net income by household. Romania ranks last in 2017, with only EUR… Mai mult

Adapting pensions to economy and society – Romania’s position within international context by four benchmarks

According to OECD data, net pension wealth in Romania (calculated for 2016) was 8.3, a value significantly below the average of 12.3 recorded at the… Mai mult


Labour cost: steepest and largest increase in the EU. And mostly concentrated on non-business sector

de Marin Pana , 9.7.2018

Romania recorded in the first quarter of 2018 the highest labour cost increase among all EU member states, according to data released by Eurostat.

With a 12.7% increase and concentrated on the non-business sector, our country outpaced Latvia (+ 11.2%) and Hungary (+ 10.3%).

It is noteworthy and worth to pay attention, the signal level specified in the requirements of the EU macroeconomic scoreboard, which signals significant imbalances in national economies, is 12% and we are the only who exceed it.

The result comes shortly after the EU statistical body announced the 15% increase of the same economic indicator for Romania in 2017, at values expressed in euro. Last year we also were European champions in the field, ahead of Bulgaria (+ 12.0%), the Czech Republic (+ 11.2%) and Hungary (+ 10%).

Immediately behind these countries were Lithuania (+ 9%), Poland (+ 8.7%), Estonia (+7.4%) and Latvia (+ 7%). This shows that we are dealing with an objective process of convergence towards labour remuneration levels from the West.

Only that the speed of this process in Romania is higher than recommended and the trend of increase is significantly higher in the non-business sector, which is not directly linked to the labour productivity increase (which showed a decline in the first quarter from + 6.4% in January to just + 0.2% in March).

For reference, we mention that the EU-28 average hourly labour cost increase rate was 2.7% compared to the same quarter of the previous year, while the rhythm was lower in the Eurozone (only +2.0%) and there was even a decline of -1.5% in Portugal.

Of course, the higher rhythm of increasing wage costs is justified in Romania by the relatively low level from where we started. We have only reached 6.3 euros/hour as an average last year (excluding the agriculture and public administration, in enterprises with at least 10 employees), compared to an average of 24 euro/hour across the European Union and 25.9 euro/hour in the Eurozone.


  • Evolution of salary cost in Romania, in the local currency (2014-2017)
  • Year
  • Salary cost (RON/hour)


The advance in labour costs was one of the factors that contributed to the increase in prices of the industrial production price index to 4.2% in April 2018 compared to the same month of the previous year, and they will be transmitted through the supply chain across the economy over the coming months.

Unfortunately, while it was normal for the GDP share representing the employees’ remuneration to increase to values closer to the European practice (from 34% in 2016 it reached 36% in 2017 and is to reach 37% this year and the 40% threshold in 2021), the balance of the increase distribution was clearly upset in favour of the public sector.

The 12.7% increase registered in Romania is mainly due to the increase by 18.3% in the hourly labour cost in the non-business sector, while the manufacturing industry, which determined the most and set the tone of the economic growth, only benefited from 9.9%.

Significantly, according to the latest official data, the ratio between the average wage in the manufacturing sector and the national average wage fell below 87%, while at the European level it is around 100%.

In conclusion, we have a record salary increase in the EU, which we have also maintained at the beginning of this year above the recommended theoretical threshold. Focused with a priority on sectors that are not directly linked to the labour productivity and the GDP growth.

A significantly declining level, according to the signal estimate on Q1 2018 (only 4%, from 6.9% in 2017), which should determine us to correlate more closely these two indicators.

Mergeți în homepage ›

Publicat la data de 9.7.2018

Lăsați un comentariu


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

New 100% Romanian tractor has been launched. Features, endowments, price

IRUM Reghin launched the first 100% Romanian tractor, announced Digi24, designed and built by the company’s engineers, 15 years after the Romanian tractor manufacturing disappeared.… Mai mult

Romanians from abroad sent as much money to Romania as Government attracted from European funds and subsidies

Romanians working abroad sent EUR 2.695 billion to the country in the first eight months of 2018, equalling the European funds and subsidies received in… Mai mult

Bucharest Stock Exchange: European record increase of reference index, old liquidity issues

The main index of the Bucharest Stock Exchange (BVB), BET, registered the second highest increase in the European Union (8.5%) in the first nine months… Mai mult

Estimates of Capital Economics: GDP is losing speed in Q3 as well, growth could be reduced to 3.5%

The first estimate of the economic growth in Romania in the third quarter shows a reduction down to 3.5% (year-on-year), after the previous quarter's Gross… Mai mult

Mugur Isarescu - BNR: Wages should increase by market forces not by politicians

Wage increases should be based solely on productivity growth and be made "by market force", not by politicians, the Governor of the National Bank of… Mai mult

OMV postpones decision to assume an investment in natural gas from Black Sea for next year

Austrian OMV Group postponed its decision on the Black Sea investment for next year, in the context of the offshore law adoption being postponed, Reuters… Mai mult

Justice Minister initiated procedure for dismissing General Prosecutor

Minister of Justice announced on Wednesday that asks for the dismissal of General Prosecutor Augustin Lazar (photo) for 20 reasons (they could be more, Tudorel… Mai mult

Eurobarometer / Romanians who believe that EU membership is a good thing have lost majority position

  The last Eurobarometer of the European Parliament, published in September, shows that 49% of Romanians consider that EU membership is a good thing. Compared… Mai mult

PSD announces consensus with ALDE on offshore law: 50% of production is sold on Romanian commodity exchange, maximum 30% deductions for operators

PSD and ALDE reached consensus on amendments to the offshore law, the leader of PSD deputies Daniel Suciu announced on Wednesday evening and said that… Mai mult

Siegfried Muresan asks for EUR 2 billion from EU post 2020 budget to defend rule of law

MEP Siegfried Muresan (PPE / PNL) has submitted this week an amendment to the European Parliament's interim report on the EU post-2020 multiannual budget and… Mai mult