Wages in Europe will fall by an average of 1.5% in 2023

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Wages in Europe will fall by an average of 1.5% in 2023

Consulting company ECA International believes that Europe will be the region most affected by the wage drop. On average, real wages here will decrease by 1.5%. The energy and logistics crises are driving up inflation in almost the entire eurozone. The pay just can’t keep up.

Even if nominally the amount paid grows, the difference can be offset by the same rapidly growing inflation. This is clearly seen in the UK. Despite an increase of 3.5%, real wages fell by 5.6% due to average inflation of 9.1%.

In the US, the picture is similar. However, the US can make up for the 4% drop this year by curbing inflation. If the forecasts come true, America in 2023 will come out in the green by 1%.

8 of the top 10 countries where real wages are projected to rise are in Asia. In first place is India with an increase of 4.6%, followed by Vietnam — 4.0% and China — 3.8%.

Only 37% of all countries in the world could report real wage increases in 2023. The top 10 included:

  • India (4.6%)
  • Vietnam (4.0%)
  • China (3.8%)
  • Brazil (3.4%)
  • Saudi Arabia (2.3%)
  • Malaysia (2.2%)
  • Cambodia (2.2%)
  • Thailand (2.2%)
  • Oman (2.0%)
  • Russia (1.9%)

At the same time, the biggest drop is expected in 5 other countries:

  • Pakistan (-9.9%)
  • Ghana (-11.9%)
  • Turkey (-14.4%)
  • Sri Lanka (-20.5%)
  • Argentina (-26.1%)
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Source: Bloomberg

Authors: Danila

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