March 6 (Reuters) - Czech real wages fell for a fifth
straight quarter at the end of 2022, the statistics office said
on Monday, as inflation continued to take a sharp bite out of
people's paychecks and hammer consumer activity.
Data showed the real average wage fell 6.7% year-on-year in
the fourth quarter, less than a Reuters poll forecast of 7.2%
and a smaller decline than the nearly 10% drops recorded in the
two previous quarters.
In nominal terms, the average wage climbed 7.9%, its fastest
pace since the second quarter of 2021.
Inflation has soared into the double digits, hitting the
Czech economy, which became one of two in central Europe to fall
into a technical recession in the second half of last year.
To anchor the economy, central bankers have sought to keep
interest rates steady, at a more than two-decade high, while
also watching out for signs of a return of demand pressures.
"Even the first (wage) figures from several sectors in
January for sure do not show the risk of a wage-inflation spiral
beginning to materialise," Banka Creditas chief economist Petr
Dufek said.
He said a decline in purchasing power would continue
although real wages could return to growth in the second half of
this year.
For all of 2022, the real average wage fell 7.5%, with
inflation averaging over 15% last year.
High inflation around central Europe is hitting households,
who are cutting back on big purchases.
In Hungary, which also has entered a mild recession and
where inflation has topped 20%, calendar-adjusted retail sales
plunged by an annual 4.5% in January following a revised 4.1%
drop in December.
Fuel sales plunged after a state price cap was scrapped in
December, data showed.
"The big picture continues to be gloomy: in the extreme
inflation environment, especially considering the annual
increase in food prices, households hold back their spending on
food... so the decline in purchasing power continued to brake
consumption," ING economist Peter Virovacz said.
"Households are adjusting to higher prices, primarily by
smoothing out consumption, in other words, by using up their
savings."
(Reporting by Jason Hovet in Prague, and Krisztina Than in
Budapest; Editing by Toby Chopra)
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