The average net wage in Romania rose to RON 3,372 (EUR 696) in July, 8.1% more than in the same month last year.

In real terms, the net wages rose by 5.2% year-on-year, close to the pre-crisis levels (+5.9% year-on-year in February).

Surprisingly, the highest growth rates were in the sector of oil processing (+33% year-on-year), despite the refineries operating at reduced capacity. Wages in tobacco processing rose by 28% year-on-year, and salaries in education also increased by 20%.

Wages in Romania recorded double-digit real growth rates in 2015-2017. The growth slowed down in 2018 but recorded another fast advance in Q1-Q3 last year, to slow down again just before the pandemic.

The tight labor market and wage hikes in the budgetary sector were the main upward drivers. However, the public budget constraints and companies' shrinking profit margins have put an end to the prolonged double-digit real wage growth last autumn.

But on the medium to long term, the potential for a real increase in net wages in Romania remains significant - given the low current level of wages corrected for productivity. The 5.2% advance in July shows this. The net wages increased by a nominal 5.2% since the beginning of the coronavirus pandemic - namely in July, compared to February. But periods of such robust advance may become less common as the companies will try to adjust the labor cost to the post-pandemic conditions.

iulian@romania-insider.com

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