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Croatia at the Top of the EU in Labor Cost Growth by the End of 2023

Croatia was among the EU countries with the highest growth in labor costs per hour in the fourth quarter of 2023, alongside Romania and Hungary, according to a Eurostat report.

In the eurozone, the nominal labor cost per hour from October to December was 3.4 percent higher than in the same period of 2022, according to seasonally adjusted data from Eurostat. In the third quarter, it had increased by 5.2 percent, according to revised data. At the level of the 27-member EU, it increased by 4.0 percent in the fourth quarter, following a revised 5.6 percent increase in the previous three months.

Wage costs in the eurozone increased by 3.1 percent at the end of last year, while contribution costs rose by 4.2 percent. In the EU, wage costs grew by 3.8 percent, and contribution costs by 4.6 percent, according to the statistical office’s tables.

Both the industry and the construction and service sectors in the eurozone recorded labor cost growth slightly above four percent, while in the EU, growth rates were closer to five percent.

Croatia at the Top

Among EU countries, the highest growth in wage and contribution costs in the fourth quarter was recorded in Romania, with an increase of 16.9 percent compared to the same period in 2022, according to Eurostat’s statement.

Hungary follows with a cost increase of 16.3 percent, and Croatia, where total labor costs per hour from October to December were 16 percent higher than in the same period of 2022. In the third quarter, they had increased by 16.2 percent. Wage costs in Croatia from October to December were 16.0 percent higher than at the end of 2022, while contribution costs rose by 15.9 percent, according to Eurostat data.

Double-digit growth in total labor costs was also recorded at the end of 2023 in Poland, Slovenia, Bulgaria, Lithuania, Latvia, and Estonia, ranging from 13.1 to 10.9 percent. The weakest growth was observed in Denmark, Germany, Malta, and France, ranging from 2.2 to 2.8 percent.

Only Italy recorded slightly lower costs than at the end of 2022, by 0.1 percent, according to Eurostat’s report.

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