CPep

News International

Courses

If it does not go healthy, companies will start to curb wage growth, to econom

The dents have risen the fastest in the first quarter in seven years. And according to analysts, salary growth will continue. Veho moc vak kod. If prices do not rise, companies will have to curb wage demands, says UniCredit Bank chief economist Pavel Sobek.

m si can be explained such wage growth in the first quarter?
The diversity of companies in the field of remuneration is mainly due to the demand for labor, employees in wage bargaining pull for the end of the rope not the employer. The second reason for the rapid growth of wages is the increase in the minimum wage, which extends to the main wage, which are far from the minimum wage. Relatively the largest income improvement was achieved by workers in sectors with the lowest wages, ie catering and support activities for companies.

Will people’s wages and debts grow?
It is to be expected that good at first for employees in terms of compensation did not run out in the first quarter. The tendency towards a dynamic wage finger will last until it is affected by the economic slowdown associated with rising unemployment. Such a scene is not ruled out for the coming years, but let’s not look at it as the main one.

Are there any risks in this regard?
The current wage growth seems unsustainable in the long run in the sense that wage costs are growing significantly faster than corporate profits. This increases the risk that companies will react relatively quickly in times of economic discomfort. The first sectors working with low margins, such as restaurants and hospitality, could be the most endangered.

Is the current wage growth rate good for the Czech economy, can it stand it?
The short-term increases the dynamic growth of wages in the performance of the whole Czech economy. But very much code. Businesses do not withstand such rising wage costs for a long time. It is possible that the lion will soon bring them a rise in prices at which they sell their production. If not, they will have to tame wage demands.

The rapid growth of wages is also supported by the Czech National Bank. He promises to bring inflation, which the bank would see around two percent. Why didn’t it happen and when will the price rise come?
Price stagnation is a phenomenon in the whole developed world and is related to the fact that the global economy is recovering only very slowly after the financial crisis of 2009. The Czech economy is not an isolated island, although economic growth is stronger than in most European countries. Price pressures (or their absence) are reaching us firmly from abroad.

How does the current development have an impact on the termination of intervention by the central bank, ie on the weakening of the koruna?
For exporting companies, the koruna would be sent after the end of the NB’s intervention policy, further to profitability. That is why there is a certain wage restraint in the city.