Germany's real wage growth rate for the first half of this year was recorded at 3.1%, the highest in nine years.
On the 13th (local time), the German think tank Hans B?ckler Foundation (WSI) analyzed wage agreements concluded from last year to the first half of this year and found that the nominal wage increase rate was 5.6%, while the real wage increase rate, considering inflation, was 3.1%.
The real wage growth rate is the highest since 2015, when it was 2.2%.
Germany experienced rapid inflation after the COVID-19 pandemic, resulting in three consecutive years of negative real wage growth from 2021 through last year.
WSI attributed the rise in Germany's real wage growth rate to the fact that most workplaces recently paid inflation compensation bonuses amounting to up to several thousand euros to make up for real wage losses over the past few years.
However, despite this wage increase, analysis suggests that it is still insufficient to boost Germany's purchasing power. WSI explained that this year's real wage growth rate only recovers about half of the purchasing power lost over the past three years, stating, "For stable economic growth, real wages need to rise further."
In fact, the European Central Bank (ECB) is weighing additional interest rate cuts. Robert Habeck, Germany's Federal Minister for Economic Affairs and Climate Action, said during a visit to a heating system manufacturer the day before, "If the ECB lowers interest rates further, the construction industry could emerge from recession."
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