2011-08-31 - Latvia's wages growth highest in the three Baltic countries (MatasM)
Latvia’s average monthly gross wages grew by 5.5% yoy in the Q2. The quarterly change in gross wages stood at 3.9%. In June real wages picked up by 2.4% thus adding stimulus to consumption.
In the public sector earnings increased by 7% yoy to EUR 715, while in private sector wages were up 5% to EUR 627. The fastest earnings growth was recorded in professional services, apparently driven by rapid recovery and flexible remuneration structures. However the major sectors (e.g. manufacturing, transport and storage) demonstrated lower than average results.
Despite having the highest unemployment rate among the three Baltic countries, Latvia stood out with the highest annual growth rate of gross wages in Q2. Latvia’s wages in nominal terms (EUR 667) were higher than in Lithuania (EUR 610), but lower than in Estonia (EUR 857).
Assessment: Rapidly shrink unemployment and solid economic growth will allow for higher growth of wages in the short-term, however vague outlook of the key export-orientated sectors may curb earnings rally in the future. Nonetheless we increase our forecast to 5% yoy for the end of 2011.
Vytaute Pilipauskaite
Analyst
