SIMILAR ARTICLES

Brief picture of economy. 2018 GDP growth after first nine months: 4.2%

The economic growth on the first three quarters of 2018 was 4.2%, both in gross series and the seasonally adjusted series, according to data published… Mai mult

Budget revenue, historical minimum – below two-thirds of EU average as a share of GDP. Declining trend and low values ​​across the board

Romania ranked penultimate among EU member states in 2017 in terms of budget revenues share of GDP, according to Eurostat data. With only 25.8%, our… Mai mult

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

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… Mai mult

“Man, there is still time”/ We meet 13 out of 14 criteria on European dashboard: but how do we overcome two neuralgic points?

According to Eurostat, Romania observed 13 of the 14 indicators set for the scoreboard of the macroeconomic situation in the EU member states last year.… Mai mult

Romanian research has come below the level registered at the EU accession moment. And it reached one sixth of EU 2020 target

Romania insists on staying on the penultimate position among the European Union member states in terms of R & D expenditure in 2017, according to… Mai mult

Cronicile

Real salary goes “down to Earth”. Health and education are still Cinderella

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
  • Construction
  • Public administration, defence, etc.
  • Transport
  • IT&C
  • Trade
  • Manufacturing industry
  • National average
  • Hotels and restaurants
  • Financial intermediation and insurance
  • Health
  • Education

*

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.

Mergeți în homepage ›

Publicat la data de 16.4.2018

Lăsați un comentariu


NEWS

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

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