UPDATE 1-Czech cbanker says union wage demands in line

(adds details, background)

PRAGUE, Oct 16 (Reuters) - Union demands for a nominal 7 percent increase in wages next year are in line with expected productivity growth, Czech central bank Governor Zdenek Tuma said on Monday.

Union leaders have said such a nominal wage rise would imply around a 4 percent real wage hike with inflation running at 3-3.5 percent.

"I can state ... that the demand of the unions is on the level of the expected growth of labour productivity," he said after a meeting with a leader of the country's top union group.

"The second issue is whether this is good or bad, which I really do not want to evaluate (at this moment)," he said adding he was avoiding comment so that he would not be put into the middle of the wage hike debate.

Czech unemployment has been falling and household spending rising amid record economic growth of over 6 percent and growing purchasing power.

The unemployment rate dropped to 7.8 percent in September from 8.8 percent a year ago.

Collective wage agreements cover about 30 to 40 percent of all labour contracts. In the second quarter, Czech real wages grew by 3.9 percent year-on-year after a 4 percent rise in the previous quarter.

((Reporting by Jan Lopatka, Writing by Alan Crosby; prague.newsroom@reuters.com; Reuters Messaging: alan.crosby.reuters.com@reuters.net; +420 224 190 477))

Keywords: ECONOMY CZECH WAGES