Real wage growth is projected to be slightly higher in 2026 than in 2025 in Europe, but which regions will outperform?
Real wages in the eurozone have largely recovered from their sharp decline during the high-inflation period of 2022, according to the European Central Bank (ECB). Nominal wages have been rising faster than prices, meaning Europeans can stretch their paychecks further. As a result, real wages in the eurozone in early 2025 are close to the levels seen before the inflation surge in late 2021.
International organisations such as the OECD have not yet released their cross-country wage reports for 2025, which are expected in early 2026. Surveys nonetheless offer an indication of pay trends.
According to the Employment Conditions Abroad’s (ECA) 2025–26 Salary Trends report, real salaries have risen across Europe in 2025 in nearly all surveyed countries — a trend expected to continue into 2026.
By the end of 2025, notes the report, real salaries will rise in 23 of the 25 European countries surveyed, while Romania (–0.9%) and Ukraine (–3.2%) will see declines. Among the rest, growth ranges from 0.2% in Austria to 5.1% in Turkey.
In Turkey, a nominal wage increase of 40% combined with the IMF’s inflation projection of 34.9% results in a real rise of 5.1%. This makes Turkey the country with the strongest real salary growth, with Bulgaria and Hungary ranking next.
Among Europe's 'Big Four' economies, France ranks highest, followed by Germany, Italy, and then the UK.
Turks' purchasing power eroded by inflation
Turkey is also expected to record the highest real salary growth in 2026, at 8.1%, exceeding the level seen in 2025.
“Turkey stands out from other countries in Europe as the salary rises and inflation levels are much higher,” Steven Kilfedder, head of product analytics at ECA, told Euronews Business. “But Turks are still a long way behind the buying power they used to have.”
Kilfedder underlined that workers in Turkey have experienced years of real wage decreases as inflation has soared higher than wages. The real wage decline was sharp in 2022 and still significant in 2024.
Median growth expected to notch up in 2026
ECA projects median real salary growth of 1.4% across 25 countries in 2025 and 1.7% in 2026. Romania (-0.7%) is expected to see another decline, while all other countries will record positive growth.
Hungary, Poland, Czechia, and Bulgaria will be among the highest-growth group.
“Eastern European economies are generally forecast to outperform their Western European peers once again, benefitting from faster economic growth and higher productivity,” the report stated.
The UK will still see the lowest real salary growth among the major European economies at 1.1%, but this marks a clear improvement compared to 2025.
The UK and Italy do lag modestly behind France and Germany in terms of predicted real salary increases for 2026 — but the key difference is in predicted inflation.
“While the UK is expected to see the largest salary rises next year, with 3.6% increases predicted, the gains will be somewhat eaten by higher inflation than in peer countries,” Steven Kilfedder said.
Apart from Greece (0.9%), projected growth exceeds 1% in all countries.
Why are major economies below the average?
Besides the UK, major Western European economies such as Spain and the Netherlands will continue to lag behind the regional average. The report noted that despite easing inflation, these countries are still grappling with issues such as sluggish productivity growth, tight fiscal conditions, and employers’ caution about long-term pay commitments.
The results are based on a survey of 200 multinational companies conducted between August and October 2025. The survey asked organisations what salary rises they had instituted for 2025 and those they anticipated in 2026. Using inflation rates from the IMF’s World Economic Outlook published in October 2025, ECA calculated the real salary growth.
