Minimum wage will remain unchanged

The mandatory minimum wages for c. 1.3 million employees will rise by an
average 4% next year – a development which should support effective wage
growth. Overall, the expected trend in wages and employment as well as the
upcoming increase in pension payments (west: 3.09%, east: 3.23%) should lift
households’ nominal disposable income by c. 31⁄4% in 2018. The savings rate is
unlikely to move much from its current level of 9.7%.

The expected pick-up in inflation, to 1.6%, will offset a part of the nominal wage
increases and thus lead to real income growth of c. 13⁄4%. A productivity growth
of c. 1% should result in an increase of unit labour costs by 11⁄2% to 13⁄4% –
similar to that seen last year.