Wages in Poland Rise 10% Faster Than Inflation, Analysts Report

Wages in Poland's corporate sector rose by an annual 12.0% in March, outpacing inflation by 10 percentage points, according to data from the Polish statistics office. The average monthly salary reached 8,409 zlotys ($2,074.76), in line with analysts' expectations.

On a monthly basis, wages increased by 5.4% in March. However, corporate employment fell by 0.2% year-on-year to 6.501 million people, slightly more than the expected 0.1% decline "Wage increases have also been seen in the public sector, introduced in March and April," noted the PAP news agency.

Despite some signs of cooling, the overall labor market situation in Poland remains strong, with companies continuing to hoard labor due to concerns about not being able to replenish their workforce when the economy improves. This, combined with pro-social government policies, is expected to result in double-digit wage growth this year.

Why this matters: The sustained wage growth in Poland offers a glimmer of hope amidst economic uncertainties, as the country's industrial sector experiences a slowdown. With real wage growth remaining in double digits for the second consecutive month, consumer spending is expected to be the key driver of GDP growth in 2024 and 2025.

Given the significant decline in inflation, real wage growth dynamics are similar to those seen in the late 1990s. The Polish Central Statistical Office (GUS) attributed the 5.4% month-on-month increase in the average gross salary to various factors, including wage hikes, payments of awards and bonuses, as well as retirement benefits.

Key Takeaways

• Wages in Poland's corporate sector rose 12% annually in March, outpacing inflation.
• The average monthly salary reached 8,409 zlotys ($2,074.76), in line with expectations.
• Corporate employment fell 0.2% year-on-year, slightly more than the expected 0.1% decline.
• Wage increases have also been seen in the public sector, introduced in March and April.
• Real wage growth is expected to drive GDP growth in Poland in 2024 and 2025.