Issue link: https://maltatoday.uberflip.com/i/1543797
6 maltatoday | SUNDAY • 8 MARCH 2026 NEWS Real wages recover on paper, but everyday costs still bite Central Bank analysis shows real wages have recovered since the inf lation surge, but households still feel the strain from higher prices on everyday essentials, particularly food and other regular purchases JAMES DEBONO jdebono@mediatoday.com.mt REAL wages have largely recov- ered from the inflation shock following the pandemic and the energy crisis, but many house- holds still feel worse off when paying for everyday essentials. The prognosis comes from a new analysis carried out by a Central Bank of Malta econo- mist, which covers the period between 2021 and 2025. CBM Principal Economist Ab- igail Marie Rapa examined why official data showing a rebound in real wages does not always match consumers' lived expe- rience at supermarket tills and when settling monthly bills. The analysis notes that while broad indicators such as the Harmonised Index of Consum- er Prices (HICP) show that real wages—nominal wages adjust- ed for inflation—have returned to, and even surpassed, their 2021 levels, workers tend to be more sensitive to price changes in everyday goods and recurring expenses. These Frequent Out-of-Pock- et Purchases (FROOPP), which include groceries and regu- lar household bills, rose more sharply at the peak of the in- flation surge in late 2023 than broader price indices. When wages are measured against this "everyday" basket, purchasing power was still perceived to be below 2021 levels as of late 2025, the study found. The squeeze on real wages was most acute between 2021 and 2023, as global supply imbal- ances following the pandemic and energy shocks linked to the Russia-Ukraine conflict drove inflation sharply higher. Be- cause wages tend to adjust with a lag, real earnings declined sig- nificantly during this period. As inflation moderated through 2024 and 2025, nomi- nal wage growth began to catch up, supported by productivity gains and compensation claims by workers seeking to offset earlier price increases. By the third quarter of 2025, real wag- es stood nearly 5% above their 2021 levels. The impact, however, varied across sectors. Public admin- istration and defence experi- enced the steepest drop, with real wages falling more than 7% below 2021 levels at their low- est point. The services sector al- so recorded a decline of around 2%. The public sector saw a marked rebound in late 2024 and 2025 following new col- lective agreements for teachers and civil servants, bringing re- al wages in the sector to 2.7% above 2021 levels by late 2025. In contrast to the trends seen in many other European coun- tries, real consumer wages in Malta's construction and indus- try sectors remained remarka- bly resilient during the recent inflationary period. While these energy-intensive sectors across the euro area saw real wages fall and remain below 2021 levels as late as early 2025, real wages in Malta's construction sector stood nearly 5% above 2021 lev- els as early as the fourth quarter of 2023. This divergence is largely attributed to government in- tervention to stabilize energy prices, which shielded local producers and workers from the direct impact of global energy shocks that hampered similar industries elsewhere in Europe. According to the report writ- ten before the war in Iran, the outlook is presently cautiously positive. With the labour market ex- pected to remain tight and productivity gains projected to continue, real consumer wages are forecast to rise further. By 2028, they are expected to be 10.8% higher than in 2021, potentially narrowing the gap between statistical recovery and households' day-to-day experi- ence of the cost of living. Although on paper real wages broadly recovered, the lived experience showed that consumers still felt the pinch when buying everyday essentials and paying monthly bills EXPERIENCED public re- lations specialist, Richard Mifsud has joined MediaTo- day as chief operations of- ficer. Managing Director Saviour Balzan welcomed Mifsud: "Richard brings with him over three decades of experi- ence across communications, marketing, and strategic lead- ership. He steps into the role with a track record that aligns closely with MediaToday's objectives to streamline oper- ations and enhance its drive towards digital innovation." Mifsud's professional ca- reer encompasses a steady progression through Malta's communications and media landscape. His long tenure at two of Malta's leading com- munications agencies, BPC and JPA, followed by senior roles at Yellow and MIDI plc, position him as one of Mal- ta's leading communications strategists with hands-on ex- perience in corporate com- munications, stakeholder en- gagement, and organisational strategy. At MediaToday, publisher of MaltaToday, BusinessTo- day, Illum, various TV pro- ductions and other leading titles, Mifsud's role as COO will be pivotal. Balzan said that Mifsud was joining the media company at the right time. MediaToday is one of Mal- taToday's leading media companies and operates in a competitive environment, where Mifsud's experience in integrated marketing, cor- porate branding, and public relations will be of essence to strengthen the company's operations while continuing to innovate across different platforms. Richard Mifsud joins MediaToday as chief operations officer MediaToday welcomes newly appointed chief operations officer