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Croatia Sees Notable Rise in Average Wages Amidst Labour Shortage and Inflation

Croatia has witnessed a significant increase in its average net salary, which reached €1,156 in September this year. 

This figure marks a substantial €144 rise compared to September last year. Despite an annual inflation rate of 6.7% in September, the average net salary has effectively increased by 7% year-on-year.

This development continues the upward trend in net wages that began in March this year. Since the start of the year, salaries have consistently risen, averaging an increase of €226. Consequently, the average gross salary now stands at €1,596.

Split, Croatia

The wage growth is attributed to various factors. One primary reason is the increasing demand for higher wages due to the erosion of real disposable income over the past year, a consequence of inflation. Additionally, a strong demand for labour amidst a shortage of skilled workers has played a crucial role.

Analysts from RBA point out that due to the lack of qualified workforce, employers are raising wages not only to retain their existing employees but also to reduce costs associated with new hires. This strategy is particularly evident in the private sector, further buoyed by the growing number of employees in the IT industry. This collective scenario underscores the dynamic interplay between market forces and economic policies in shaping Croatia’s current wage landscape.

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