According to analysts, this will have a positive impact on consumption and hence in economic development its increase minimal salary. Actually Professor EKPA Panagiotis Petrakis An increase of 9.5% is estimated to lead to an increase in consumer demand of 500 million euros.

However, not everyone agrees on the size of growth that goes beyond productivity growth, which, in their opinion, can have negative consequences for employment and the competitiveness of the economy.

According to Panagiotis Kapopoulos, chief economist at Alpha Bank, the fact that the minimum wage hike has been gradual over the past two years has helped the business sector absorb it. “The increase was needed after years of freezing the minimum wage,” he says. “After all, the next element is very important: that in 2023 some increase in economic activity is also needed from personal consumption, in addition to investment. Raising the minimum wage helps a lot in this direction.” He notes that Alfa-Bank recently revised its forecast for growth rates in the region of 2.5% from the previous forecast of 1.6%-1.7%, taking into account the increase in the minimum wage. In fact, according to the bank’s chief economist, there may be other room for an increase, as the minimum wage has been frozen at a very low level for a very long time.

On the other hand, however, there are reservations about the scale of the increase. A financial analyst estimated yesterday that this increase was large, exceeding agency recommendations. In general, over 1.5 years, the growth amounted to 18.9%, which is higher than the sum of inflation and labor productivity growth (about 11%). And while he acknowledges that some growth must have been given, given inflation as well as the need to distribute growth among factors of production, he points out that when it is large, it affects the competitiveness of the economy.

According to Mr. Petrakis, growth is within the endurance of the economy, although the endurance of enterprises differs depending on their size. Note Features:

“The important question is whether companies are able to meet these obligations. There are two elements to this: a) The fact that the current increases were preceded by an inflationary increase in business income. b) Gross operating income for the economy as a whole in the fourth quarter of 2022 increased by 17% compared to the fourth quarter of 2021, and dependent labor wages increased by 3% over the same period. However, the participation of companies of different sizes in generating surpluses is uneven, with large companies in a better position.

Either way, I think it’s a bold move to boost workers’ incomes within the strength of the economy, which will play a valuable role in the recovery of the economy, both in terms of setting expectations and in terms of the real economy.”