Czech trade unions will demand salary increases between 8% and 10% next year to compensate workers for the impact of high inflation, the head of the country’s biggest labor union said.
Households in the central European country are reeling from the worst cost-of-living crisis in three decades that caused a deep drop in real income. Consumer price growth has been easing from a peak of 18% a year ago, with the central bank predicting it to slow toward the 2% target in early 2024.
“Inflation is causing the biggest problems that we have,” Josef Stredula, the chairman of the Confederation of Trade Unions, said in a debate on public TV on Sunday. “Purchasing power is declining.”
Central bankers in Prague are closely watching wage trends as a key factor for their monetary-policy deliberations. The bank last month began discussing a plan for lowering borrowing costs, but it listed the country’s tight labor market — the Czech jobless rate is one of the lowest in the European Union — among inflation risks.
The central bank forecasts average inflation at 2.1% next year and predicts nominal wage growth of around 8%.
