Wage growth still uncomfortably strong in a few EMs

Labour market conditions have weakened across much of the emerging world over recent months and wage growth is, on average, back in line with pre-pandemic rates. But there are wide regional variations. In Asia, wage growth remains soft. In Latin America and Central and Eastern Europe, inflation pressures stemming from labour market dynamics aren’t as acute as a few years ago. But the strength of wage growth will prevent central banks from bringing interest rates back to neutral in parts of these regions.