Forecasted increases in labor costs and productivity in the Eurozone 2023-2026

According to the forecasts of the staff of the Eurosystem - the group of central banks of countries which use the Euro as their currency - the rate of increase in unit labor costs (the labor cost at which one unit of production is produced) will decrease considerably over the coming years, declining from a rate of 6.1 percent in 2023, to 4.1 percent in 2024 and 2.6 percent in 2025. This decrease in unit labor costs is set to be driven by a slowing in the growth of compensation per employee, which will decline from 5.3 percent in 2023 to 4.6 percent in 2024, coupled with an increase in labor productivity, the total output per person employed.