Real Wage Expectations in European Economies and OECD Report
According to the OECD report, real wages are showing different trends in Europe's major economies; a decline is expected in some countries, while an increase is projected in Germany.
The OECD's 2026 Employment Outlook report revealed varying expectations regarding real wages in Europe's leading economies. Accordingly, inflation-adjusted wages are expected to decline in certain countries, while an increase is projected in others.
General Outlook in the OECD Report
According to the OECD's 2026 Employment Outlook report, the trajectory of real wages in Europe's major economies varies from country to country between the first quarter of 2026 and the first quarter of 2027.
Pressure Factors on Wages
Geopolitical uncertainties and rising energy costs are among the factors emphasized in the report as elements that could further increase pressure on workers' wages.
Expectations in Italy and Spain
In Italy and Spain, real wages are projected to remain below early 2026 levels until at least the end of 2027, signaling a prolonged stagnation.
Expectation of Sharp Decline in Italy
Italy stands out as the country expected to experience the sharpest drop in real wages among the five major economies. Real wages are estimated to remain 1.9 percent below the level of the first quarter in the third quarter of 2026.
Situation in Spain and France
While the decline in real wages in Spain is expected to be more limited but longer-lasting, real wages in France are projected to bottom out by dropping 0.5 percent in the second quarter of 2026.
Expectation of Increase in Germany
Germany holds the distinction of being the only country among the five major economies where real wages are expected to rise throughout the period in question, diverging from the other major economies.