High inflation still significantly lowers the purchasing power of Slovaks, real wages dropped by almost 5% at the beginning of the year
Although wages in the SR rose at a pace that was among the most significant in the last 20 years, they were unable to withstand inflation, for the fifth consecutive quarter. Real wage growth in the 1st quarter of 2023 was achieved only by those working in accommodation and food services, who have the lowest wages in the long term.
In the 1st quarter of 2023, the average nominal monthly wage of an employee in the SR economy in reached EUR 1 327, a year-on-year increase by 9.5%. On a gross basis, employees received by an average of EUR 115 more than at the beginning of 2022. Despite a relatively dynamic increase in wages, the wage growth was not enough to cover high inflation, and the average wage actually dropped by 4.9% year-on-year. After a nearly 8% drop at the end of last year, it was the second-highest real wage depreciation in 22 years. Seasonally adjusted average wages increased by 3.3% compared to the 4th quarter of 2022.
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In the 1st quarter of this year, the average nominal wages in the first quarter of this year was recorded by all monitored sectors of the economy. Wages rose relatively fastest in the sectors with the lowest long-term wages – in accommodation and food services (by 17%), construction (by 14.8%) and in other activities (by 13.8%). Significant year-on-year growth was able to largely compensate the employees for the effects of inflation in these sectors. Employees in accommodation and food services were the only ones to see an increase in their real wages, namely by 1.7%. However, their gross monthly wages amounted to EUR 771, which was only 58% of the average wage for the entire Slovak economy.
Employees in the field of information and communication, in art, entertainment and recreation, and mainly in financial and insurance activities, felt the most significant drop in real wages at the level of 7 to 9%.
The industry, where the most people was employed, showed a year-on-year wage growth by 9.9% (to EUR 1 398) during the 1st quarter of 2023, but in real terms wages dropped by 4.5%. Among the sectors with the largest number of employed persons, trade could more effectively face the pace of inflation, in which nominal wages increased by 11.8% (to EUR 1 266). The real decrease in wages of trade workers reached 2.9%, which was less than the average for the entire Slovak economy.
Currently, the highest average monthly wage above EUR 2.3 thousand was recorded in the sectors of financial and insurance activities, information and communication, and the supply of electricity, gas and steam. In ten out of 16 sectors of the economy, the wage was lower than the average for the whole economy of the SR. The lowest average nominal wage, which did not even reach EUR 1 000, was recorded by employees in accommodation and food services, other service activities and construction.
From a territorial point of view, the nominal monthly wage was above average only in Bratislavský kraj (EUR 1 676. In the other regions, it ranged from EUR 1 023 in Prešovský kraj to EUR 1 230 in Trenčiansky kraj. In all regions, the average wage was higher than in the 1st quarter of 2022, with the highest relative increase by 12.7% in Nitriansky kraj and 11.3% in Prešovský kraj. Real wages dropped the least in Nitriansky kraj (by 2.1%) and the most in Košický kraj (by 6.3%).
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