Real wages in Europe are expected to grow slightly more in 2026 than in 2025, in a context in which the recovery of purchasing power has already approached, in several economies, the levels prior to the inflationary peak of 2021. According to the European Central Bank, the rise in nominal wages above prices helped to reverse much of the loss recorded during the period of high inflation in 2022.
The comparative portrait for 2025 and 2026 results, in part, from a survey of multinationals and inflation projections used to transform nominal increases into real gains, that is, already discounting the price rise.
What European projections say for 2025 and 2026
The Salary Trends 2025-26 report, by Employment Conditions Abroad (ECA), estimates that, by the end of 2025, real wages will increase in 23 of the 25 European countries analyzed, with declines seen in Romania (-0.9%) and Ukraine (-3.2%). Overall, ECA projects a median real growth of 1.4% in 2025 and 1.7% in 2026.
Eastern Europe stands out again
Among the countries with the highest expected growth, the ECA places Eastern and Central European economies such as Hungary, Poland, Czechia and Bulgaria, associating this performance with faster rates of economic growth and productivity gains compared to several Western European peers.
Turkey emerges as the most extreme case. For 2025, the ECA points to a real increase of 5.1%, the result of a nominal increase of 40% combined with an inflation projection of 34.9% used in the calculation. For 2026, the forecast places the country at the top again, with estimated real growth of 8.1%.
Steven Kilfedder, responsible for product analysis at ECA, highlighted to Euronews Business that the country stands out for operating with levels of inflation and salary increases much higher than those in Europe, although without recovering the purchasing power lost in previous years.
Among the four largest European economies, France appears ahead, followed by Germany, Italy and the United Kingdom. Even so, the report notes that countries such as Spain and the Netherlands are expected to remain below the regional average, despite the slowdown in inflation, pointing to factors such as weaker productivity, tight budgetary conditions and companies’ prudence in prolonged salary commitments.
Projections for Portugal: moderate increases and inflation dictating real gains
In the Portuguese case, some available signs point to a more contained evolution than that observed in the leaders of the ranking, but with the possibility of real gains if inflation remains low. The July edition of WTW’s Salary Budget Planning Survey indicates average salary increases of 3.5% in 2025 and a forecast of 3.4% in 2026.
On the price side, the European Commission anticipates that inflation will slow down and reach 2.0% in 2026. The Bank of Portugal, in the Economic Bulletin of October 2025, points to an average annual inflation of 1.9% in 2026. In a simple reading, nominal increases in the order of 3.4% with inflation close to 2% would translate into real gains close to 1.4%, although the final result depends on what actually happens to prices and how the increases are distributed across sectors and salary profiles.
In parallel, the Government approved the increase in the national minimum wage to 920 euros in 2026, 50 euros more compared to 2025, an update that affects the base of salary distribution, but does not determine, in itself, the evolution of the average salary.
How the calculations were made
It states that the results are based on a survey of 200 multinational companies carried out between August and October 2025, with questions about increases implemented in 2025 and expectations for 2026. To transform nominal increases into real variation, ECA used inflation rates from the IMF’s World Economic Outlook, published in October 2025.
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