Latvia: Wages up in Q2 despite pandemic
- Wage growth slowed, but remained in positive territory, at 3.9% y/y in Q2
- Most sectors saw slowdown, while only a few recorded a decline
- Wages picked up at a similar annual pace in both public and private sector
Despite a substantial slump in economic activity, coupled with an increase in unemployment and reduced bargaining power for workers, the average wage continued to pick up in Q2. With the growth rate slowing, it was still surprisingly strong. Monthly data show that May saw the weakest wage growth (+2.5% y/y), followed by some rebound in June (+5.6% y/y).
Annual wage growth in H2 is expected to remain at Q2 pace or slightly greater as many sectors are seeing strong rebound in Q3. Overall, in 2020 the wage growth is likely to exceed 4% as opposed to the previous forecast of 3%.
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