In Austria, on the other hand, price increases last year were offset by wage increases.
- You might also be interested in: Wifo: Inflation in Austria will not fall to 2 percent until mid-2026
Compared to 2022, the loss of purchasing power has slowed down significantly, the WSI continues. Due to the high inflation rates at the time, wages in the EU had fallen by 4.2 percent in real terms, in Germany by as much as 4.4 percent, and in Austria by 3.6 percent. For this year, real wages are again expected to increase in almost all EU countries. However, this will not compensate for the declines of recent years, according to the WSI experts.
Significant loss of purchasing power
Overall, real wages fell in 12 of the 27 EU countries in 2023. There were particularly significant losses in purchasing power in the Czech Republic (minus 4.4 percent), Malta (minus 3.8 percent) and Italy (3.3 percent). Real wages also fell by 0.3 percent in Germany. However, real wages also increased in several EU countries, most significantly in low-wage Romania (plus 7.7 percent) and Belgium (5.3 percent), where wages automatically rise with inflation by law.
From the perspective of employees, the crisis has not yet been overcome, judged WSI researchers Thilo Janssen and Malte Lübke. “They have borne the majority of the real income losses associated with the energy price shock following the Russian attack on Ukraine.” There is “still a need to catch up” in terms of wage development. After all, consumer prices have been rising permanently, they are just not rising as quickly as the wave of inflation has ended.
more from Economy
