Bank of Estonia economist: Average wage purchasing power fell further in Q3
While official figures show that the average declared wage in Estonia rose by around 10 percent on year in the third quarter, as it did in the previous quarter, the purchasing power of said average wage continues to be reduced by rising consumer prices, Bank of Estonia economist Orsolya Soosaar said Thursday.
Statistics Estonia figures published Thursday showed the growth in the average age slowing in the third quarter of 2022. Wages in the second quarter were 10.1 percent higher than they were a year earlier, but up 8.1 percent on year in the third quarter. Wage growth was slowed by the private sector — in particular by manufacturing and construction, according to a press release.
Data from the Estonian Tax and Customs Board (MTA) shows that the average declared wage rose by around 10 percent, as it did in the previous quarter. The purchasing power of the average Estonian wage continues to be reduced by rising consumer prices, however, and Estonia is far from the only country in the euro area to be experiencing this.
Labor costs in Estonia rising against those in other countries, however, will be an important factor affecting the competitiveness of exporting companies in the near future.
Wages have also risen a little faster in 2022 than before at private companies in the service sector. Higher inflation than before is encouraging wages to continue rising, as the increased cost of living is putting greater upward pressure on wages. There are often limits on how work can be made more efficient in the service sector, especially as the economy is cooling, and so fast growth in wages will be passed on to higher prices for services, which is already apparent in price statistics.
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Editor: Aili Vahtla