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Double-digit wage growth and consumption revival

ECONOMYDouble-digit wage growth and consumption revival

This week, the January statistics from the Polish labor market were published. Wage growth in the private sector accelerated year-on-year (y-o-y) from 9.6% in December to 12.8% in January (market estimate 11.0% y-o-y). This is the highest wage increase since October 2023. The figures thus returned to double digits, indicative of a resurgence in consumption. Employment in the private sector fell for the fourth consecutive month. The decline slightly deepened compared to December to y-o-y -0.2%.

The most recent data from the Polish industry show that production increased by 1.6% y-o-y in January (market estimate 3.1% y-o-y). The Polish retail sector was a positive surprise in January, with sales being 3% higher y-o-y after two months of decline (market estimate 1.3% y-o-y). This is the largest increase since September 2022.

In the preliminary estimation for the February PMI surveys in Germany and the Eurozone, the manufacturing sector data were disappointing. In Germany, the decline in activity deepened substantially (from 45.5 points to 42.3 points), though the market had estimated an improvement (46.1 points). The situation also deteriorated in the Eurozone, albeit slightly less (from 46.6 points to 46.1 points). However, the services sector surprisingly outperformed (Germany: 48.2 points, estimate 48 points, Eurozone: 50 points, estimate 48.8 points).

The euro strengthened against the dollar and was traded at 1.082 USD/EUR on Friday morning. The zloty strengthened against the euro on Monday and remained mainly in the 4.31 – 4.33 PLN/EUR range for the rest of the week. The zloty also strengthened against the dollar and was quoted below the level of 4 PLN/USD during the week.

Roksana Cicha, an analyst for payment institution AKCENTA.

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