The Czech National Bank published an analysis finding that wage cost pressures are steadily weakening as productivity and economic activity recover, although nominal wage growth remains strong. Wage growth rose from 6.6% in both 2024 and 2025 to 8.1% in the first quarter of 2026, well above the 4.5% long-term equilibrium rate consistent with the inflation target. Nominal wages increased about 45% between the fourth quarter of 2019 and the first quarter of 2026, but real wages rose only 1.5% and did not exceed their pre-pandemic level until early 2026. Productivity recovered and labour cost pressures eased in 2024 and 2025, but the improvement was uneven. Manufacturing and parts of the services sector have yet to generate enough productivity growth to offset rising wages, while information and communication technology, trade, transport and construction recorded gains. The Labour Hoarding Indicator has also fallen from pandemic-era highs to near its long-term average, supporting expectations of a continued partial productivity recovery.
Czech National Bank2026-08-07
Czech National Bank finds wage cost pressures easing gradually despite 8.1% wage growth
The Czech National Bank found that wage cost pressures are easing gradually as productivity recovers, despite wage growth reaching 8.1% in the first quarter of 2026. The improvement remains uneven, with productivity in manufacturing and parts of the services sector still insufficient to offset rising labour costs.