On Tuesday morning we met new data from the Polish labor market. The growth rate of average wages in March decreased to 7.7 percent. year on year with 7.9 percent in February At the same time, employment decreased by 0.9 percent. year on year and 0.1 percent monthly. Both of these data sets from the enterprise sector proved to be in line with forecasts. We also got to know the statistics of the industry: production increased, but the appetites were greater. On Wednesday we will know the results of retail sales.
The economists of Bank Pekao evaluated Tuesday's data from the labor market as important, because it is a sealing of the trend observed since the beginning of the year. “The rate of wage growth decreases and most likely has permanently decreased to a level that we can consider to be normal and not shocking. In 2025, for the first time, since the wages in 2022 reacted strongly to inflationary shock, we saw a seven in the front and two months in a row. Thus, we are less than a percentage point on wage dynamics, which we observed in 2017-2019, i.e. times of relative economic stability, “they wrote in the commentary.
See also: This may be the first such decision in over a year and a half. Most is forged in the MPC
Experts of ING Bank Śląski estimated that the source of reduction of wage pressure in March this year was the effect of the base, because a year ago significant wage increases took place in a number of industries in response to an earlier increase in inflation. “We estimate that the scale of these index compensation was clearly lower this year due to the lower level of inflation and the more difficult financial situation of enterprises, including a decrease in margins,” they wrote.
In their opinion, subsequent months should bring a continuation of a decrease in wage dynamics around 6 percent. Year on year in the fourth quarter (for the last three years it was almost a month in the two -digit month, i.e. unusual high and propelled inflation). According to PKO BP analysts in the following months, the dynamics of remuneration can move “slightly bumpy path”, but they expect that by the end of the year it will remain one-digit, in the range of 6-8 percent, which would mean a clear reduction in the pace against an average of 11.2 percent. in 2024
Also, according to economists, Credit Agricole Bank Polska, the reduction of the annual wage dynamics was the result of a low last year's base and weakening pay pressure, mainly associated with restructuring in the enterprise sector.
“In real terms, the rate of salary growth in companies has decreased to 2.7 percent y/RW March (lowest from September 2023) compared to 2.9 percent in February, and the dynamics of the real payroll fund (accidental growth of the average real remuneration and the number of employees – ed.) Fell to 1.8 percent The dynamics of the payroll fund in the enterprise sector decreased in the first quarter to 2.3 percent – they wrote.
The door for interest rates is opening
PKO BP experts reminded that the risks associated with the formation of wage pressure have been mentioned many times in the council's argument behind maintaining a restrictive monetary policy. “In the data for March, we see signs of permanent standardization of payroll processes, with poor demand for work, which may be one of the important arguments supporting the decision of the MPC on reduction of interest rates in May” – they wrote.
According to ING Bank Śląski analysts, the general image of the labor market remains beneficial, but after three years of a two -digit rate growth rate its temperature is more and more clearly cooled. “At the same time, this is a signal – to which the President of the NBP pointed out in April – which can give space for cuts of interest rates in Poland. Today's data from the labor market certainly strengthen the arguments of supporters of the cost of money. We believe that the slowing rate of salary growth, lower than the expectations of NBP Base inflation, weaker American dollar and relatively low oil prices They will be arguments for cutting the NBP feet in May” – they assessed in the commentary.
Bank Pekao economists have a definite vision of the closest RPP meetings (6-7 May and 3-4 June). In their opinion, a potentially permanent descent of remuneration dynamics around 7-8 percent. Year on year, the MPC gives a strong argument for a reduction in interest rates, because-as they pointed out-the current level of reference rate (5.75 percent lasting for over a year and a half) was also in force when wages increased at a rate of 10-12 percent.
“With accompanying processes on the labor market, weakening the global situation, positive CPI inflation reads with the perspective of reaching the MPCs at the turn of the year and the weaker than the results of industry and construction for March were expected, the council has more pigeons at his disposal. In our opinion, foot reductions in May and June (twice 0.50 percentage points) are already decided. The question that we ask ourselves whether there will be space for even more cuts this year and for now we decide not to formulate an unambiguous answer, “they wrote.
Credit Agricole experts are more cautious. They assessed that Tuesday data supports their forecast, according to which the MPC will reduce interest rates by 0.50 percentage points. at the May meeting. Second reduction by 0.50 percentage points This year they expect in the third quarter.
