On the other hand, the month-over-month pay rise may reflect the massive job cuts among medium-income workers, while better-paid employees managed to keep their posts.

“The slowdown of annual pay hike rate was milder-than-expected, falling to 6.3% in July from 8.7% a month earlier compared to our 4.9% forecast. However, salaries recorded a month-on-month rise in July, which might seem disorienting given the rising unemployment rates and opening of the labor market. Below-average paid workers may account for the majority of jobless”, ING Bank Romania said in a report.

ING analysts also note that “surprisingly, the monthly growth had not been fuelled by the public sector but by the private sector”.

“Companies seem to have been able to pay more to their employees in July, despite the constant deterioration of the economic environment. This suggests a loss in competition and probably lower profits. In our view, the pay adjustment measures, both in public and private sector is too slow and is likely to accelerate through the remainder of the year. Therefore, we forecast negative growth rates of salaries at economy-wide level for the last two months of the year”, ING said.

So far, pay adjustment was more accelerated in the public sector rather than private sector, as public servants’ pay increased more than in the private environment.