The average gross salary increased by 6.8% to CZK 23,435 in 4Q07. Factoring in inflation, the average wage in real terms increased by 1.9%, which is significantly less than in previous quarters. Wages for the entire year increased by 7.3% and the average salary reached CZK 21,692. With an average inflation rate of 2.8%, real wages increased by 4.4%.
The growth rate for real wages slowed down significantly towards the end of the year due to the increase in the rate of inflation. High inflation should also impact this year's real growth rate, keeping it to between 1 and 2%. This should be visible at the household consumption level, thus impacting GDP. It simultaneously limits inflationary pressure and the need for another tightening of monetary policy. The tightening of monetary policy is currently significantly impacted by the CZK rate. With this data, there should be no reason for an interest rate hike in the coming months.