Unit labour costs increased by 0.5 per cent in 2007 when compared to the previous year, data published by the Central Bank shows.
The Central Bank's annual report for 2007 says that estimates of wage growth, based on officially-registered collective agreements, indicate "a moderation" to 2.9 per cent in 2007 from 3.5 per cent in the previous year.
Collectively negotiated wage growth in the private sector dropped from 3.8 per cent in 2006 to 2.6 per cent last year. However, in the public sector this accelerated to 3.5 per cent in 2007, after having slowed down in the previous year. The pick-up in public sector wages reflects the back-loaded nature of the six-year collective agreement between the government and the trade unions for the civil service for the period 2005 to 2010.
"Broader measures of labour cost developments similarly reflect moderate growth. National accounts data show that growth in average employment income per employee slowed from 3.3 per cent in 2006 to 1.5 per cent 2007. To some extent, the deceleration in the latter also reflected a downward bias as a result of the lower earning capacity of the part-time category, which had a downward impact on the average income of all employees.
"At 1.5 per cent, the increase in nominal compensation per employee exceeded the 1.1 per cent rise in productivity, measured in terms of real GDP per person in employment. As a result, unit labour costs, defined as the wage cost per unit of real output, increased by 0.5 per cent from a year earlier. In comparison, unit labour costs in the euro area increased by 1.3 per cent," the Central Bank said.
In its annual report, the Central Bank forecasts that economic growth this year will slow down to a range of between 2.3 per cent and 2.9 per cent after having peaked at 3.8 per cent in the previous year. This is being largely attributed to a slower growth in private consumption.
The forecasts are not good either when it comes to inflation. Despite a slowdown in Malta's major trading partners, inflation in such countries is expected to rise, mostly due to persistently high energy and food prices. "These developments," the Central Bank warns, "will have a significant impact on inflation in Malta, where the annual average inflation rate based on the HICP is forecast to rise sharply, to around 3.5 per cent - 3.9 per cent, from 0.7 per cent in 2007".
The Central Bank's annual report for 2007 says that estimates of wage growth, based on officially-registered collective agreements, indicate "a moderation" to 2.9 per cent in 2007 from 3.5 per cent in the previous year.
Collectively negotiated wage growth in the private sector dropped from 3.8 per cent in 2006 to 2.6 per cent last year. However, in the public sector this accelerated to 3.5 per cent in 2007, after having slowed down in the previous year. The pick-up in public sector wages reflects the back-loaded nature of the six-year collective agreement between the government and the trade unions for the civil service for the period 2005 to 2010.
"Broader measures of labour cost developments similarly reflect moderate growth. National accounts data show that growth in average employment income per employee slowed from 3.3 per cent in 2006 to 1.5 per cent 2007. To some extent, the deceleration in the latter also reflected a downward bias as a result of the lower earning capacity of the part-time category, which had a downward impact on the average income of all employees.
"At 1.5 per cent, the increase in nominal compensation per employee exceeded the 1.1 per cent rise in productivity, measured in terms of real GDP per person in employment. As a result, unit labour costs, defined as the wage cost per unit of real output, increased by 0.5 per cent from a year earlier. In comparison, unit labour costs in the euro area increased by 1.3 per cent," the Central Bank said.
In its annual report, the Central Bank forecasts that economic growth this year will slow down to a range of between 2.3 per cent and 2.9 per cent after having peaked at 3.8 per cent in the previous year. This is being largely attributed to a slower growth in private consumption.
The forecasts are not good either when it comes to inflation. Despite a slowdown in Malta's major trading partners, inflation in such countries is expected to rise, mostly due to persistently high energy and food prices. "These developments," the Central Bank warns, "will have a significant impact on inflation in Malta, where the annual average inflation rate based on the HICP is forecast to rise sharply, to around 3.5 per cent - 3.9 per cent, from 0.7 per cent in 2007".