Romania ranks 8th in 2009 largest salary chart

Romania ranks 8th in a standings of 53 nations in terms of salary rises estimated by companies this year, according to a survey conducted by London-based human resources consulting firm ECA International, Mediafax reports. Employees in South America and India will see the highest salary increases this year, according to the poll.

Employees in Venezuela and Argentina will have pay increases of 24 per cent in 2009, from 22 per cent last year, and of 12 per cent respectively. India comes third, with 10.8 per cent. At the opposite end, employees in Japan, Lithuania and Ireland, will receive the smallest salary increases. In the US, roughly 40 per cent of companies will freeze salaries in 2009.

For Eastern Europe, the London-based company calculated salary hikes slightly under 5 per cent. Europe-wide, 30 per cent of companies plan to have salaries frozen. Worldwide, salaries will be up by an average of 4.7 per cent, against 6.2$ in 2008.

Analysts with ING bank Romania hold it most likely for salary increases to become negative in real terms towards late this year, which will make economy contract even further in 2009 and 2010 The annual rise in the nominal net salary rose from 12.9 per cent in January to 19.8 per cent in February, yet ING analysts believe the trend as only transitory. The bank's analysts anticipate that March too will see a minor positive impact, amid the likelihood for portions of the 13th salary to have also been paid.

'In the public sector, the salary trend should be fuelled by lower profits and lower business opportunities, while in the public sector, the need to curb the fiscal policy also involves further constraints on income policies. This means the purchasing power will fall and there will be lower demand for loans and more bad loans. Eventually, the economic activity should be affected even more,' states the ING report. ING experts predict Romania's economy will contract by 3.5 per cent this year, and 0.2 per cent in 2010, following a 7.1 per cent growth in 2008.

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