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Real wages remain supportive overall
Confirmed
In Short: Real wage growth remains supportive of household consumption across most of the region, with Serbia and Hungary leading the pack, and Romania experiencing a decline.
In the second quarter of 2026, real wages in Serbia rose by more than 7% year-over-year, followed by Hungary at around 6%. Romania, however, saw a significant drop of over 7% year-over-year.
While real wages in Slovakia declined by 0.5% year-over-year, the overall picture remains positive, with strong gains in 2025 continuing into the first half of 2026.
However, the escalation of the Middle East conflict and higher commodity prices are expected to push inflation up, reducing real wage growth and households' spending appetite.
Central banks in countries like Czechia and Poland are closely monitoring wage growth, as it plays a crucial role in determining interest rate outlooks.
What's confirmed
- In the second quarter of 2026, real wages in Serbia rose by more than 7% year-over-year, followed by Hungary at around 6%. Romania, however, saw a significant drop of over 7% year-over-year.
- While real wages in Slovakia declined by 0.5% year-over-year, the overall picture remains positive, with strong gains in 2025 continuing into the first half of 2026.
- However, the escalation of the Middle East conflict and higher commodity prices are expected to push inflation up, reducing real wage growth and households' spending appetite.
- Central banks in countries like Czechia and Poland are closely monitoring wage growth, as it plays a crucial role in determining interest rate outlooks.
What's still developing
- Overall, our baseline scenario is still the stability of NBP interest rates in 2026-27, as long as we believe that the commodity prices will start reversing their upward trend soon in line with the forward curve.
- In general, real wage growth remains supportive of household consumption across most of the region.
- Next on tap in Oz will be the Westpac’s Consumer Confidence index, housing data, and speeches by the RBA’s Hunter and Hauser USD/JPY weakens further and remains close to the 154.00 neighbourhood, or seven-month lows, ahead of the opening bell in Asia.
- The pair’s severe retracement comes in response to rising bets of a rate hike by the BoJ at its next meeting coupled with repatriation speculation, while the offered stance in the Greenback adds to the overall bearish mood.
- Soren said Kumar was like an elder brother who remained affectionate, guiding and steadfastly supportive during difficult times.