The Austrian National Bank (OeNB) expects a gradual decline in wage growth in Austria through the end of the year.

The OeNB’s “Wage Tracker” – a tool for tracking collective agreement (Kollektivvertrag) wage trends, developed because of the rise in Eurozone inflation – shows that while wages in the private sector will slow down this year, salary increases in the public sector will stay high.

“This is mainly due to a major public sector agreement, which includes a 9.3% increase from January 2024,” the National Bank said.

In contrast, increases in the private sector are lower, with agreements for metalworkers at 8.5% and retail employees at 8.4%.

Wage increases in the construction and hospitality sectors, which only took effect in May, were also lower due to reduced rolling inflation, at 7.1% and 7.25% respectively. “This results in a notably higher tariff wage growth in the public sector compared to the private sector in 2024,” the bank concluded.

The tracker reports that current Austrian tariff wage growth stands at 8.5%, significantly above the Eurozone average. “Tariff wage growth peaked at around 9% in early 2024 and is expected to gradually decrease to about 8% by year-end,” the National Bank explained.