UPDATE 2-German chemicals sector agrees 4.4 pct pay rise

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By Frank Siebelt

LAHNSTEIN, Germany, April 16 (Reuters) - Workers in Germany's chemicals sector have won a 4.4 percent pay rise this year and a further 3.3 percent increase for 2009, the IG BCE chemical workers' union said on Wednesday.

The deal will apply to some 550,000 workers in the chemicals sector -- a major industry in Germany that last year generated 13 percent of the country's exports, and which includes leading companies such as DAX-listed BASF (BASF.DE: Quote, Profile, Research).

The deal will also give workers a one-off payment in 2008 equating to a raise of 0.5 percent. All told, the new wage contract will have a duration of 25 months. The union had initially demanded a rise of 6.5 to 7.0 percent for 2008.

The European Central Bank is paying close attention to wage negotiations in Germany, concerned that generous deals in Europe's largest economy could fan inflation. Euro zone inflation hit a record high of 3.6 percent in March.

Andreas Rees, an economist at Unicredit in Munich, said the ECB would have preferred a lower wage settlement and is likely to be "very vigilant" about what impact the accord has.

"It will be grist to the mill for ECB inflation hawks," Rees said. "They will point to the risk of second round effects."

Provided the raise remained specific to the industry and was not repeated in other sectors, it wouldn't necessarily harm job creation in Europe's largest economy, Rees said.