European Central Bank projects eurozone wage growth to reach 2.8 percent

The European Central Bank (ECB) reports that wage growth in the eurozone is expected to reach 2.8 percent by the second quarter of 2027. According to the ECB's wage trend indicator, which is updated using data from collective agreements signed through August 2026, negotiated wages are projected to grow by 2.7 percent in the first half of 2027.

While the projected growth shows a slight deceleration, the current coverage of employees under these agreements remains relatively limited at 28.8 percent. This coverage is expected to increase as new collective agreements are signed. For the current year, the indicator—which includes time-smoothed one-off payments—suggests wage pressure will be 2.2 percent, based on a 46.9 percent coverage of employees in monitored countries.

The ECB noted that lower wage indicator levels in the first half of the current year were primarily due to the technical effect of one-off payments made in late 2024 that were not repeated this year. These effects are expected to disappear by the second half of the year. The indicator excluding one-off payments averages 2.6 percent this year, suggesting these payments have limited significance in recent collective agreements.