Real wages in Europe are projected to rise slightly in 2026 after largely recovering from the sharp declines experienced during the high-inflation period of 2022, according to recent surveys and reports. Nominal wages have been increasing faster than prices in many countries, allowing Europeans to stretch their paychecks further. Early 2025 figures suggest that eurozone workers are earning nearly the same in real terms as before the inflation surge of late 2021.
The Employment Conditions Abroad’s (ECA) 2025–26 Salary Trends report indicates that nearly all surveyed European countries recorded real wage growth in 2025, a trend expected to continue into 2026. By the end of 2025, 23 out of 25 countries are forecast to see increases in real salaries. Romania and Ukraine are exceptions, with expected declines of 0.9% and 3.2% respectively. Among the countries experiencing growth, rates range from 0.2% in Austria to 5.1% in Turkey.
Turkey stands out with the strongest real wage growth. Nominal salaries there rose by 40% in 2025, outpacing the IMF’s projected inflation rate of 34.9% to deliver a real increase of 5.1%. Analysts caution, however, that despite these gains, Turkish workers are still recovering from years of declining purchasing power. “Turkey stands out from other countries in Europe as the salary rises and inflation levels are much higher,” said Steven Kilfedder, head of product analytics at ECA. He added that Turks remain far below the buying power they once enjoyed, with real wage declines particularly sharp in 2022 and still significant in 2024.
Among Europe’s major economies, France is expected to see the highest real salary growth, followed by Germany, Italy, and the UK. The UK, while forecast to achieve 1.1% real growth, continues to lag behind its continental peers, partly due to higher projected inflation that offsets nominal pay increases. Spain and the Netherlands are also expected to remain below the regional average because of slow productivity growth, fiscal constraints, and cautious employer policies on long-term wage commitments.
Eastern European countries are projected to outperform Western Europe in 2026, benefiting from faster economic growth and higher productivity. Hungary, Poland, Czechia, and Bulgaria are among the nations expected to see the highest real salary increases. The report predicts median real wage growth across the 25 surveyed countries of 1.4% in 2025 and 1.7% in 2026, with Greece at the lower end of the spectrum at 0.9%.
The report is based on a survey of 200 multinational companies conducted between August and October 2025. Respondents provided information on salary adjustments for 2025 and anticipated increases for 2026. Real wage growth calculations were adjusted using inflation rates from the IMF’s World Economic Outlook published in October 2025.
Europe’s wage recovery underscores a cautious optimism as households benefit from pay gains outpacing inflation, although disparities remain across regions and major economies.
