Wage increases are inevitable, but certain sectors lack workforce – BNR governor says

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The wage increases are inevitable, yet the movement of the workforce enhances them – National Bank Governor Mugur Isarescu said on Wednesday.

“Several quarters ago I presented the index on tensioning the labour force market. Now things become obvious. Several sectors lack workforce. We said it and we repeat it, wage increases are inevitable and are enhanced by the labour force movement. We need to be wise, to keep them under control in reasonable terms, coordinated with several indicators – productivity is only one of them, indicators related to macro-economic balance and financial macro-stability. These are very valuable issues. Romania reached this stage following great sacrifices and it would be an error to weaken the macro-balances,” Isarescu said.

He added these do not depend on BNR and a balanced policy mix is needed, as the monetary policy can counter-balance weaknesses in an under-optimal manner.

“We have good developments of the economy and productivity. We don’t have yet a macro-economic situation facing inevitable risks. The risks are rising, but they can be avoided. We need to keep things balanced. This means a good cooperation with the government and the parliament. We have avoided some major risks. Last year the major risks were related to the banking legislation. They are diminished, but are mentioned by the rating agencies. They also mention as risks not the wage increases, but the level of wage increases, the pace, the steps and the fiscal balances. We are going to do our duty, this is all I can say,” Mugur Isarescu said.

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