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Jakub Rybacki, Economist at ING, notes that Poland’s corporate wages decelerated from 7.5% to 7.2% YoY in July, below the consensus (7.6% YoY) and close to ING’s forecast (7.3% YoY).

Key Quotes

“The wage structure in recent months has been less balanced compared to 1Q. A major contribution came from the construction sector, where growth exceeded 10% YoY, with hikes from companies carrying out infrastructure projects.”

“On the other hand, wage growth in trade, transportation and administration (where labour shortages are most evident) decelerated to or even fell below average dynamics in the enterprise sector.”

“Finally, wages in the services sector are on a downward trajectory. In all, the underlying structure suggests that a strong acceleration is unlikely in the coming months.”

“The number of companies reporting wage increases has not changed in the last two quarters (after seasonal adjustments).”

“Taking both factors into account, we forecast that wage growth will peak in 4Q18 at 8.5% YoY.”