Wage-inflation spiraling up – analysts point out
19:31
Average wages in the business sector in April 2022 rose 14.1 percent y/y. Employment also increased last month, up 2.8 percent y/y, according to the Central Statistical Office (GUS).
This represents a larger increase than predicted by analysts, who had expected a 12.6 percent increase in wages and a 2.7 percent increase in employment. However, on a monthly basis, the average wage fell, albeit slightly – by 0.6 percent, to PLN 6,626.95.
Bank Millennium economists, who had forecast even lower wage growth – at 11.3 percent y/y, point out that even at the level of their projections, the data would confirm "the heated labor market in Poland, which in the face of strong demand for labor contributes to the inflation-wage growth spiral.
"Wages in April accelerated from 12.4 to 14 percent y/y. In other words, we shouldn't complain about inflation, as wage increases more than offset it statistically. Unfortunately, this does not bode well for the prospects of falling inflation. The wage-inflation spiral is moving fast. We are silent on the accuracy of the forecasts," Pekao economists added.
