Labour cost: steepest and largest increase in the EU. And mostly concentrated on non-business sector
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… Mai mult›
Company financing: Firms’ aversion to credit – at high levels. Most favourite banking product – account overdraft
The rise in interest rates and fees is becoming increasingly worrying for companies and maintains companies’ aversion to banking lending at high levels, according to… Mai mult›
“Everything in One Hand” project continues: Law which pushes Court of Auditors beneath Administration’s feet – adopted
The Senate adopted on Thursday the draft amending Law 94/1992 on the organization and functioning of the Court of Auditors, which contains amendments that could… Mai mult›
Government is hardly competing with private economy on banks’ money. Which are satisfied: less work, lower risks
The volume of government credit has increased about 10 times over the last 10 years, and the share in total banking investment in Romania… Mai mult›
de Marin Pana , 16.4.2018
The average gross salary earning announced by the INS for February 2018 was 4,128 lei, 0.4% lower than in the previous month. Paradoxically, the net average nominal salary earning increased slightly (+ 0.1%) to 2,487 lei, due to a change in the structure of the income similar to money earnings and included in the salary earnings.
In real terms (adjusted with the inflation registered), the purchasing power of the average wage decreased by 0.2% compared to January 2018. At the same time, the real reference salary (the purchasing power of the money earned, expressed as an index related to the one registered October 1990) dropped compared to the previous month from 180.9% to 180.6%.
Net average salary maintained around EUR 533 at the average exchange rate of March 2018 (the effective month of payment), almost the same as in November 2017 (when there were no significant seasonal variations following the bonuses paid at the end of the year). Basically, wages in euro have maintained at the same level for almost half a year.
After decreasing in January to the minimum of the last few years (only + 3.5%), the purchasing power advance compared to the same month of the previous year returned to a closer value to the economic growth, much the pace recorded in 2017. The explanation does not come much from the decrease in the pace of wage nominal increases (+ 11.2%) but from the significant increase in the value of the inflation index (4.72%).
- Evolution of average salary earning and purchasing power over the last 14 months
- Month Net average salary Euro/RON Net average salary Purchasing power (%,12 months)
Noteworthy, the values in euro pcs express the purchasing power of wages in Romania for the EU average prices, which ensures the technical comparability in terms of living standards.
In other words, EUR 533 earned in the country equal EUR1,063 in a Western country where prices are at the EU average (closest to this situation would be Italy).
Salaries in the national economy return to the economic growth reality
The beginning of 2018 has brought the inevitable situation of the salary growth in real terms getting close to the GDP growth (recently reset at 6.9% for 2017). Exceptions are constructions for reasons related to the seasonality of this activity and the salaries getting toward the level imposed by the new legislation. Noteworthy, ancillary activities related to the production have benefited to some slightly larger extent from the wage increases.
Encouraging to some extent, the increase in the manufacturing sector in February slightly rose above the average increase at the national level and was, not by chance, the closest to the GDP growth rate (both in real terms). Following the bonuses paid at the confluence of the years, the financial intermediation and insurance sector resumed a modest rate of income growth.
It should be noted that the largest percentage increases of incomes in the public sector were in the public administration. Respectively 15.6% in nominal terms and 10.4% in real terms, following the possibility of autonomous increasing the salaries in the administrative-territorial units, but also the increases at the central level.
- Distribution of salary nominal increases by sectors between January 2017 and January 2018
- Sector Salary February 2017 Salary February 2018 Change
- Public administration, defence, etc.
- Manufacturing industry
- National average
- Hotels and restaurants
- Financial intermediation and insurance
Contrary to the public discourse and against the trend of expectations created among some categories of state employees representing more than half a million people, health and education were seen in February 2018 as the “Cinderella” of the economic growth. Moreover, teachers and support staff have “succeeded” the poor performance of being below the national average.Manufacturing and transport are the only areas, otherwise below the national average in terms of payment value, where increases in the purchasing power appear justified in relation to the 2017 economic result. With the mention that the manufacturing industry has not yet exceeded the critical threshold of 90% of the national average that is also much below the European practice.
These developments explain to a large extent the protests in these sectors and will be remedied as measures of adjusting the salary increases will come into effect (sooner for the health sector), but the effects will only be seen in the March data, with the effect in April.
Lăsați un comentariu
Fitch confirms Romania's rating at BBB- but warns: fiscal loosening is risky for macroeconomic stability
Fitch Ratings confirmed on Friday Romania's rating for long-term foreign and local currency debt at BBB-, with a stable outlook, but warned that fiscal loosening… Mai mult›
Finance Minister Eugen Teodorovici said at a press conference held in Bistrita that "a mechanism of this type is in progress”, a mechanism on tax… Mai mult›
AOAR - Economy against new Criminal Code: businessmen denounce excessive protection provided to officials who cause damages to economy
The Businessmen’s Association of Romania (AOAR) asks the ruling coalition to explain the mechanism by which, after changes introduced on Wednesday in the Criminal Code,… Mai mult›
Number of insolvencies increased by 12% in first five months. Suspended activities - plus 31%, dissolutions - plus 59%
The increase in the number of companies and PFAs in insolvency was 11.97% in the first five months of this year, compared to the same… Mai mult›
The investment needs in Romania's transport infrastructure exceed EUR 70 billion, while the available resources by 2030 are EUR 36 billion, according to the Transport… Mai mult›
Liviu Dragnea announces a dictatorship through ordinances: "Correct procedural approach through Parliament is wrong, from the law on investment fund to laws on the judiciary. We will be firmer and more radical"
"We decided to be much firmer and more radical. My way of having a correct procedural approach in the Parliament proved wrong. In the Parliament,… Mai mult›
Deputies adopted a draft law on Wednesday whereby entitlement to social assistance ceases when a job is refused. The decision, Agerpres announced, was taken with… Mai mult›
The National Agency for Employment (ANOFM) grants subsidies of RON 900/month to employers who employ graduates of educational institutions, with contracts of indefinite duration, within… Mai mult›
C.P. Tariceanu, before the heads of Senates from EU: The European Commission has encouraged the parallel state, in Romania it is like in the 50's
Calin Popescu Tariceanu (foto) delivered a very tough speech on Friday, in the Senate, addressed to the European Commission, which he accused of encouraging the… Mai mult›
The National Bank of Romania (BNR) sent to banks for consultation a draft amending Regulation 17/2012, which provides for a consistent lowering of the indebtedness… Mai mult›
Senators adopted on Wednesday the draft for amending the Code of Criminal Procedure, by 74 votes for to 28, against. The bill goes to the… Mai mult›
RBL: Workforce crisis is worse than economic crisis - 3.4 million Romanians have left the country in last 10 years
Migration is one of the most serious problems facing Romania at this time, along with the lack of infrastructure. However, the return of Romanians to… Mai mult›
Romania's economy could grow by 5.1% in 2018, according to the World Bank summer forecast. The estimate has been improved by 0.6 percentage points above… Mai mult›
Ministry of Energy: Natural gas from Black Sea will be exported through Onesti - Isaccea - Negru Voda network
The Ministry of Energy issued for Transgaz the construction permit for the consolidation of the transport system between Onesti (Bacau) and Isaccea (Tulcea) and for… Mai mult›