The Polish economy is recovering from the weakening, and proof of this is the fact that in February 2024 real wages in Poland grew the most in several decades.
In February 2024, real wages in Poland grew by as much as 9.9 percent year-on-year, according to data from the Central Statistical Office. Bank Pekao analysts emphasize that this is the best result in 25 years.
As for the average salary in the sector of companies employing more than 9 people, the growth dynamics again exceeded market expectations and accelerated in February to 12.9% year-on-year, while the forecast was 12% and the consensus was 11.3%. In January, the average salary dynamics in Poland amounted to 12.8% year-on-year. Pekao analysts emphasize that wage pressure in Poland is still strong.
In the case of real wages, the increase was as much as 9.9 percent year-on-year, the best since 1999.
This is a solid justification for the continuation of our forecasted strong rebound in consumption this year and next. However, the wage dynamics readings for January and February pose a significant risk of higher than currently forecasted (above 10%) average wage dynamics in 2024. However, we believe that later in the year wage dynamics will start to slow down slightly due to the complete phasing out of the wage-price spiral effect (which we have been dealing with since 2022). Real wages should eventually converge to productivity growth in the economy and in our opinion this will happen through the channel of slowing wage dynamics. Currently, wages are the biggest “elephant in the room”, pushing back the prospect of inflation returning to the target, but at the same time supporting our scenario of maintaining interest rates at an unchanged level this year
– Bank Pekao wrote in its commentary.
To sum up, Pekao analysts are optimistic about the further development of the Polish labor market and in the long term they expect an increase in employment.