Purchasing power of wage and salary earners will increase in 2012

Helsinki (28.12.2011 - Juhani Artto) In Finland talk on the economy in the media has in recent months been very pessimistic despite the fact that purchasing power for wage and salary earners is expected to grow in 2012. The constant pessimistic utterances coming from experts have succeeded in undermining people's confidence in their own economic and financial viability to such an extent that it echoes autumn 2008 when recession badly hit European economies.

These gloomy sentiments ignore the prognosis published by the Taxpayers' Association of Finland (TAF) earlier in December. TAF estimates that wages and salaries will increase on average by 3.4 per cent, whereas prices are predicted to rise by 2.6 per cent. As taxes will slightly increase the real value of wages and salaries will improve on average of 0.6 per cent.

Amidst growing fear of recession TAF's prognosis should offer some comfort although a 0.6 per cent increase would mean the weakest development during the new millennium, except for 2011. TAF estimates that real wages and salaries decrease in 2011 by 0.8 per cent. In 2000-2010 the figure rose annually between 0.9 and 5.3 per cent, the average rise having been 2.9 per cent.