RPT-Czech cenbanker warns against wage rise over 8 pct

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Inflation pressures in the Czech economy would threaten to rise if trade unions demand more than 8 percent wage growth for next year, central bank policy-maker Vladimir Tomsik was quoted as saying in a newspaper interview.

In remarks due for publication on Thursday, Tomsik told the daily Hospodarske Noviny that productivity trends permitted a maximum rise of 8 percent without eroding firms' competitiveness.

According to an advance copy of the report, Tomsik said he would rather see a 7 percent wage increase to soothe concerns about burgeoning price pressures in the robust economy, powering ahead at an annual clip of about 6 percent.

"Should trade unions demand higher growth (in wages than 8 percent annually), then the risk of wage-inflation pressure rises significantly," said Tomsik, a rather neutral member of the seven-member policy board who has taken a hawkish stance on inflation in past months.

This year's steady fall in unemployment, to a decade low of 6.2 percent in September, and growing evidence of workforce shortage in the booming manufacturing and construction sectors have fuelled concerns about wage contagion at the central bank.

Policymakers raised interest rates to a five-year high of 3.25 percent in August, but a steep rally in the crown currency in past months and uncertainty fed by a global credit crunch has led it to signal at least a brief pause in further tightening.

[PRAGUE/Reuters/Finance.cz]