The growth of real wages in Europe during 2024 was strongest in the eastern member states of the continent, while a decline was recorded in only four countries. Although gross annual wages nominally increased in almost all 32 European countries, in some, this growth did not exceed inflation, reports Euronews.
When nominal wage growth is adjusted for inflation, the real growth becomes significantly more modest. According to the Taxing Wages 2025 report by the Organisation for Economic Co-operation and Development (OECD) and Eurostat data, real wages, i.e., the purchasing power of workers in 2024, increased the most in Turkey, Romania, and Bulgaria.
Turkey Records the Highest Real Wage Growth
Turkey leads with a nominal growth of gross wages of as much as 82.9 percent compared to 2023, a result of extremely high inflation of 58.3 percent.
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Despite inflation, Turkey also recorded the highest real wage growth of 15.5 percent. However, the opposition and the former head of the Turkish Statistical Institute (TurkStat) have questioned the credibility of the official inflation data, suggesting that the actual inflation could be even higher.
Romania follows closely behind Turkey, with a nominal wage growth of 20.9 percent and a real growth of 14.3 percent, thanks to relatively moderate inflation of 5.8 percent. Bulgaria ranks third with a real growth of 9.2 percent, alongside a nominal growth of 12 percent and inflation of just 2.6 percent.
In addition to them, five other countries recorded real growth above 7 percent: Malta (9 percent), Hungary (8.9 percent), Latvia (8.4 percent), Poland (7.8 percent), and Lithuania (7.2 percent).
Mild Growth in Southern Europe
Southern European countries achieved moderate growth in real wages: Italy 2.7 percent, Cyprus 2.1 percent, Spain 1.9 percent, and Greece 1.7 percent. These figures surpass those from most Western European countries but remain below the average of Eastern Europe.
Among the five largest European economies, Italy led with a real wage growth of 2.7 percent, ahead of Germany (2.2 percent), Spain (1.9 percent), and the United Kingdom (1.6 percent). France had the weakest growth among the ‘big’ countries at just 0.7 percent.
Croatia in the Upper Half
Croatia positioned itself in the upper half of the ranking with a real wage growth of 5.9 percent, resulting from a nominal wage increase of 10.1 percent and inflation of 4 percent. This places Croatia among the countries of Central and Eastern Europe that have made significant progress in the real purchasing power of citizens. Compared to the largest European economies, Croatia’s growth was significantly stronger, higher than in Germany (2.2%), Italy (2.7%), and Spain (1.9%).
In Four Countries, Purchasing Power Declined
Four countries recorded negative real growth, meaning a decline in the purchasing power of citizens as wages did not keep pace with inflation. The largest decline was in Belgium, where real wages fell by 1 percent. This was followed by Finland with a decline of 0.9 percent, Iceland with 0.7 percent, and Luxembourg with 0.4 percent.
Interestingly, Finland is the only country where nominal wages slightly decreased, from €52,907 to €52,893 annually, with inflation of 0.9 percent, leading to a modest decline in real wages.
Turkey also recorded the highest inflation rate in Europe in 2024, far above all others, with an average annual inflation of 58.3 percent. No other country exceeded the 6 percent mark. These data refer to gross wages before taxation and do not include changes in income taxes or contributions, which can also affect the real net income of citizens. After two years (2022 and 2023) marked by a decline in real wages in most OECD countries, 2024 brought a recovery of purchasing power in Europe, especially in the eastern part of the continent. However, regional differences remain pronounced, and purchasing power in some developed countries continues to stagnate.
