Wage growth slows to 4.3% y-o-y in Q4

2012-02-09



The average gross monthly wage in the national economy amounted to PLN 3,587 (approx. €812) in the fourth quarter of 2011, which is 4.3% higher in nominal terms compared with the corresponding period of the previous year, the Central Statistical Office (GUS) reported. The figure marks a significant deceleration in wage growth from 6.6% y-o-y in Q3.
Adjusted for inflation, the average wage declined by 0.3% y-o-y in Q4, compared with a real-terms increase of 2.5% y-o-y in Q3.
In 2011 as a whole the average gross monthly wage in the national economy rose by 5.4% at current prices, which in real terms translated into growth of 1.2%.



Although the significant slowing of wage growth in the national economy registered in Q4 2011 was largely a reflection of statistical factors (a markedly higher base of comparison), wages rose at an only moderate pace throughout the whole of last year. Despite the economy growing at above 4%, and in spite of the resulting robust financial health of the business sector, wage growth was kept in check by very high uncertainty over the economic outlook amid deteriorating global conditions and mounting debt crisis in the eurozone, which dampened labour demand.
Given the wage freeze in the public sector (the 2012 budget envisages wage increases for just two groups, teachers and the uniformed forces, due to take effect in the second half of the year), the anticipated weakening of economic activity, and the still difficult situation on the labour market, wage growth is unlikely to accelerate this year. We forecast that in 2012 wages in Poland will rise by about 5% in nominal terms.

Paweł Sionko
Senior Economist
PMR Publications