Wages in Q1 2025: Continued real wage growth

As the economy gradually improves, wages are also rising, both in nominal and real terms. The average gross wage in the first quarter of this year increased by 6.7% year-on-year to CZK 46,924, and after taking inflation into account, real wage growth reached 3.9%. However, this is still not enough for the purchasing power of wages to reach the 2019 level.

Wages are growing fastest where there is a labour shortage. An example is the construction industry, where the average wage increased by 10.3% year-on-year. The return to rapid growth in property prices is also enabling more significant wage increases in the real estate sector, where average wages rose by 12.4%. Below-average wage growth in healthcare (4.8%) at the beginning of the year is calling for pressure to increase wages and complex negotiations with the government again at the end of the year.

The gap between the average and the median has widened slightly again. The median wage reached CZK 38,385 in the first quarter, i.e. 81.8% of the average wage. A year ago, the ratio of the median to the average was 82.9%.

Although wages have been growing faster than prices for the second year in a row, we have paid a high price for high inflation in 2022 and 2023. We can currently buy fewer goods and services with the average wage than we could at the beginning of 2019.

For this year as a whole, we estimate that the average wage will grow by 5-7%.