Romanian Leu Seen Falling On Uneven Wage In Public, Pvt Sectors - ING

The country’s net average wage grew by 6.3% on the year in July, from an 8.7% yearly advance recorded in June. The slowdown in July was milder than ING’s forecast of a 4.9% annual growth, the report noted.

It said the month-on-month wage growth in July was fueled by increases in the private sector, as employers paid higher wages “despite the fact that economic activity continued to weaken.”

Given that wages in the public sector grew at a higher pace than wages in the private sector, ING expects the Romanian economy to decline further this year until both sectors can reach a common denominator.

“From our point of view, the wage adjustment in both the private and public sector is too slow for the moment so it might gather pace as we approach year-end. For this reason, we continue to expect negative annual growth rates in economy-wide wages during the last two months of 2009,” ING said.

Romania’s net average salary was up 6.3% in July compared to the same month in the previous year, according to data from the National Statistics Institute, or INS.

In June, the net average salary grew by 8.3% on the year, INS said.

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