Tuesday, April 16, 2024

Czech Q3 average wages up 7.6 pct yr-on-yr UPDATE

PRAGUE (Thomson Financial) – Czech average wages rose in the third quarter on the back of high demand for labour, pushing the case for another interest rate hike to cool domestic consumption.

Average wages grew 7.6 pct year-on-year to 21,470 crowns, while in real terms wages rose 5.0 pct, figures released by the Czech Statistical Office (CSU) showed today.

‘Current wage growth is supporting household consumption,’ said David Marek, an analyst with Patria Finance, adding the pressure could push inflation in the country up to 6 pct next year.

Helena Horska from Raiffeisenbank said that despite wage growth adding pressure to consumption, the strong Czech crown will likely delay a rate hike until next month.

‘I expect (the central bank) to keep rates on hold this month,’ she said. ‘The strong crown is an obstacle to faster rate hikes.’

The strength of the Czech crown has continued to ease inflationary pressures and is currently trading near record levels at 26.53 crowns to the euro and 17.94 to the dollar.

The Czech central bank has raised interest rates three times this year to cool a booming economy and most analysts expect the central bank to raise interest rates again by early next year but are divided on the exact timing.

Main Czech rates now stand at 3.25 pct, the lowest in the expanded European Union.

jason.hovet@thomson.com +420 222 191 109



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