Decline in Negotiated Wage Growth Indicated by ECB Wage Tracker
Recent update reveals a decrease in wage growth forecasts for the eurozone amid changing economic conditions.
The European Central Bank (ECB) has released an updated wage tracker, reflecting collective bargaining agreements signed up to mid-May 2025. The data indicates a decline in negotiated wage growth, with projections showing a decrease to 3.1% in 2025 from 4.7% in 2024, based on the smoothed wage tracker that includes one-off payments.
The tracker currently covers an average of 47.4% of employees in the participating countries.
For the same years, the unsmoothed wage tracker shows an average negotiated wage growth of 2.9% in 2025, down from 4.9% in 2024. The figures, particularly for 2025, reflect a downward trend attributed to the phasing out of substantial one-off payments that were factored into earlier calculations and the front-loaded wage increases in certain sectors experienced throughout 2024.
The wage tracker, differentiated by various indicators, also reveals that excluding one-off payments indicates a more stable growth at 3.8% for 2025 compared to 4.2% in 2024. Data evaluations show a projected compensation per employee growth rate for the euro area at 3.2% in 2025, showing quarterly variations of 3.5% for the first quarter, 3.4% for the second, decreasing to 3.1% in the third quarter, and 2.8% in the fourth quarter.
The ECB wage tracker releases four distinct indicators: the headline tracker reflecting smooth wage growth with one-off payments, a tracker excluding these payments to indicate structural growth, a tracker with unsmoothed one-off payments, and a share of employees covered, which reveals the representativeness of the data.
The coverage of employees under the wage tracker has also seen minor fluctuations, with an average of 48.7% in 2024 and declining slightly to 47.4% in 2025.
In a separate development, ECB President Christine Lagarde has signed a Memorandum of Understanding (MoU) with Pan Gongsheng, Governor of the People’s Bank of China, during her official visit to Beijing on June 11, 2025. This updated MoU enhances cooperation in central banking, aimed at fostering regular exchanges of information and technical cooperation between the two institutions, building upon a previous agreement established in 2008. This reaffirmation of dialogue emphasizes the importance of maintaining global cooperation in central banking practices.
The tracker currently covers an average of 47.4% of employees in the participating countries.
For the same years, the unsmoothed wage tracker shows an average negotiated wage growth of 2.9% in 2025, down from 4.9% in 2024. The figures, particularly for 2025, reflect a downward trend attributed to the phasing out of substantial one-off payments that were factored into earlier calculations and the front-loaded wage increases in certain sectors experienced throughout 2024.
The wage tracker, differentiated by various indicators, also reveals that excluding one-off payments indicates a more stable growth at 3.8% for 2025 compared to 4.2% in 2024. Data evaluations show a projected compensation per employee growth rate for the euro area at 3.2% in 2025, showing quarterly variations of 3.5% for the first quarter, 3.4% for the second, decreasing to 3.1% in the third quarter, and 2.8% in the fourth quarter.
The ECB wage tracker releases four distinct indicators: the headline tracker reflecting smooth wage growth with one-off payments, a tracker excluding these payments to indicate structural growth, a tracker with unsmoothed one-off payments, and a share of employees covered, which reveals the representativeness of the data.
The coverage of employees under the wage tracker has also seen minor fluctuations, with an average of 48.7% in 2024 and declining slightly to 47.4% in 2025.
In a separate development, ECB President Christine Lagarde has signed a Memorandum of Understanding (MoU) with Pan Gongsheng, Governor of the People’s Bank of China, during her official visit to Beijing on June 11, 2025. This updated MoU enhances cooperation in central banking, aimed at fostering regular exchanges of information and technical cooperation between the two institutions, building upon a previous agreement established in 2008. This reaffirmation of dialogue emphasizes the importance of maintaining global cooperation in central banking practices.
