Swedish wages rise at moderate rate in April, wage growth likely to rise in 2019 and 2020

Swedish wages rose moderately in April at the rate of 2.5 percent, as compared with expectations of a rise of 2.4 percent. Wages in the public sector rose 2.7 percent while wages in the business only grew 2.5 percent.

Since the start of this year, business sector wages have risen 2.3 percent on average. This signifies that the real wage growth has been nearly non-existent as inflation has been around 2 percent in the same period.

Going forward it is difficult to see any signs for the subdued growth trend to be broken. The jobless trend has been soft in the past months, and manufacturing companies are planning cutbacks.

“Wage expectations continued to fall in June and NIER revised down their forecast for wage growth in the latest Swedish economy report. The Riksbank’s forecast is 2.7 and 3.0 percent for 2019 and 2020 but most likely these numbers will be revised down next week. We estimate wage growth to increase by 2.5 percent in both years, but we see downside risks in our forecast”, said Nordea Bank in a research report.