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German real wages post biggest rise in more than three years in third quarter

Published 22/12/2014, 07:52
© Reuters. Construction workers are silhouetted while standing on a scaffolding at the construction site of the new headquarters of the European Central Bank (ECB) during a guided media tour in Frankfurt

BERLIN (Reuters) - German real wages increased by 1.8 percent in the third quarter compared with the same period in 2013, their biggest rise in more than three years and a potential support for private consumption on which the government is banking to boost growth.

Data from the Federal Statistics Office on Monday showed that a full-time worker in Germany earned an average of 3,541 euros per month before tax, excluding special payments, in the July-September period. Employees in the banking, insurance, information, communication and energy supply sectors pocketed the biggest salaries on average.

Nominal wages increased by 2.6 percent in the third quarter compared with the same period last year - more sharply than consumer prices, which were up by 0.8 percent in the same period.

The low inflation rate, which was much weaker than the average of the last 20 quarters, was the main reason for the increase in real wages, the Office said.

Private consumption is expected to be a key driver of growth this year as exports, which have traditionally propelled Europe's largest economy, are forecast to be weak.

© Reuters. Construction workers are silhouetted while standing on a scaffolding at the construction site of the new headquarters of the European Central Bank (ECB) during a guided media tour in Frankfurt

Higher wages in Germany could also help struggling euro zone states by taking the shine off Germany's competitive advantage over other members of the single currency bloc.

(Reporting by Michelle Martin; Editing by Toby Chopra)

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