According to data from the European Central Bank (ECB), wage growth in the eurozone is anticipated to decelerate substantially this year. The ECB’s wage tracker, which monitors active collective bargaining agreements, projects that wage growth, including one-off payments, will drop to 3.1% in 2025, compared to 4.8% in 2024.

This slowdown in wage growth is a key metric for the ECB, as wages are closely tied to inflation. The central bank has recently made significant cuts to interest rates, marking the seventh reduction in a year, as it works towards achieving its 2% inflation target.

Excluding one-off payments, the decline in wage growth is somewhat less severe, with a forecasted growth rate of 3.8% in 2025, down from 4.2% last year.

In recent years, wages in the eurozone had been rising sharply as workers sought compensation for the high inflation that spiked in 2022, following Russia's invasion of Ukraine and the resulting disruption of energy supplies. However, inflation has since significantly decreased, reaching 2.2% in the eurozone in March 2025.