Net wages in Romania gain momentum to real 7.5% y/y in Q2

The monthly average net wage in Romania rose by 13.2% y/y, or a real 7.5% y/y, to RON 5,170 (EUR 1,040) in Q2, according to data published by the statistics office (INS).

It was the third quarter in a row when the average net wage in Romania posted robust (+6%-8%) annual growth rates and the fifth consecutive quarter of significant positive real growth rates. Over the five quarters, the net average wage rose by a real 10%.

In early 2022, when the war in Ukraine emerged, Romania's net real wage was only 5% above the 2019 average (pre-COVID benchmark). Still, in Q2 this year, it already accumulated a significant advance of over 15% versus the same 2019 benchmark – or a +10% advance compared to the pre-war benchmark.

Not surprisingly, the retail sales gained momentum to +9.7% y/y in Q2 from the already robust +6.4% y/y pace in Q1. Over the past five quarters, retail sales rose by 7.2% y/y (volume terms, seasonally adjusted), implying a reasonable lag between households’ earnings and their consumption.

The rise of the minimum statutory wage as of July and, particularly, the higher pensions paid after September will maintain the momentum gained by households’ incomes and, consequently, private consumption. The subsequent impact on consumer prices may be relevant, particularly in the category of non-durable consumer goods.

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