Sat, Jul 04 2009

Credit crunch: Industrial association says pay rises threaten economy

Tue, Nov 25 2008 10:26 CET byDnevnik.bg 114 Views

Salaries in Bulgaria have outpaced labour productivity by a double margin over the past five years, a survey of the Bulgarian Industrial Association (BIA) showed. Pay rise in some industries like mining and hospitality outran productivity at work by 20 per cent, BIA chairperson Bozhidar Danev said.

Wages in Bulgaria have grown 40 per cent over the past three years, four times faster than in the European Union, BIA statistics showed.

According to the data of the National Statistical Institute (NSI), though, the gross annual salary in Bulgaria rose to from 3647 leva in 2002 to 5174 leva in 2007 as labour productivity increased by 50 per cent. One worker produced 15 000 leva worth of goods in 2007, compared to 10 000 leva in 2007, NSI estimates show.

A worker in the EU makes an average contribution to the gross domestic product that is eight times bigger than their Bulgarian peer.

Unjustified pay rises pose a great risk to the economy, with growing consumption pumping up inflation and widening the current account gap, Danev said. The steady trend towards wage growth outrunning productivity will hamper economic growth and spell big trouble with the worst crisis in decades tearing through the world, Danev said.

Source: Dnevnik

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