Anyone looking for signs of what the Czech National Bank is likely to do about interest rates this year will have noted his warning yesterday that the country’s economy is overheating. Speaking in an interview on Czech Television, he warned that wages are rising more quickly than at any time since 2008. They jumped 8 percent during 2017 to an average of CZK 29,504. Rusnok said that wage growth equivalent to GDP growth (4.5 percent in 2017) would have been ideal. “We need to realize that in real terms, wages are rising at around 5 percent, which is still healthy growth, but it won’t last long,” said Rusnok. And he warned that labor leaders were unwise to keep pushing for salary increases. “Unions should pay attention to whether people have pensions and get employers more involved, because the state’s resources aren’t enough. Not just increase populistic pressures on wage increases.”
