20:17 24 September 2024
PKO Economist: labor demand will rebound in ‘25 with lower unit labor costs
Piotr Bujak, chief economist at PKO Bank Polski, expects labor demand to rebound next year, aided by a reduction in labor costs (ULC) from the current double digits to low single digits. Wage growth, currently high, is predicted to halve by 2025. Government measures, including limiting the minimum wage increase to 8.5% from over 20%, are expected to slow wage growth to around 7% in 2024.
This, coupled with a global economic recovery, should boost employment, especially in export-oriented industries. Despite the current weak labor demand and employment declines, a cyclical improvement in productivity and financial health of firms is expected, leading to increased investment and potentially lowering inflation.
