Croatia was among the EU countries with the highest increases in hourly labour costs in the second quarter of 2023, considerably higher than the EU average, figures from Eurostat, the EU's statistical office, showed on Friday.

In the second quarter of 2023, hourly labour costs in the 20-member euro area rose by 4.5% compared with the same period in 2022, following a 5.2% increase at the start of the year. In the EU27, they rose by 5.0% after a 5.4% jump in the first quarter of the year.

These growth rates are the highest in both regions since Eurostat started publishing these data more than 20 years ago.

The two main components of labour costs are wages & salaries and non-wage costs. In the euro area, wages & salaries per hour worked increased by 4.6%, while the non-wage component rose by 4.0% in the second quarter of 2023, compared with the same quarter of the previous year. In the EU, hourly wages & salaries increased by 5.1% and the non-wage component by 4.4% in the second quarter of 2023.

Hourly labour costs increased the most in the services sector, by 4.8% in the euro area and by 5.2% in the EU.

In the second quarter of 2023 compared with the same quarter of the previous year, the highest increases in hourly wage costs were recorded in Hungary (+17.3%), Croatia and Slovenia (both +14.5%), Romania (+14.4%) and Bulgaria (+14.2%).

This was the highest increase in hourly wage costs for Croatia since its entry into the EU in mid-2013. In the first quarter of 2023, these costs rose by 11.4%.

Four more EU member states recorded increases above 10%, namely Poland (+13.3%), Estonia (+13.1%), Lithuania (+12.4%) and Latvia (+12.3%). The lowest increases were recorded in Malta and Germany (both +2.1%).