Page 16 - Sample PRO weekly report Poland

Polish unemployment fall motors onwards in March
Polish unemployment fell 1.8pp y/y to 8.1% in March, data from statistics office GUS showed on April 26. In monthly terms, the joblessness rate decreased 0.4pp.
The reading is 0.1pp below the forecast by the labour ministry issued earlier this month. The revised data shows Polish unemployment at its lowest level in over 20 years.
The trend of falling unemployment is an important pillar in Poland's economic recovery. With wages also on the rise, consumption looks set to continue to help drive economic growth in CEE's biggest economy. However, there is concern that the tightening labour market may begin to drag on investment and economic growth in the longer run.
The improvement on the Polish labour market began in 2014, with predictions in place for unemployment to continue to fall throughout 2017 as well. The government assumes in the budget bill that the unemployment rate will finish this year at 8%.
In nominal terms, there were 1.3mn registered unemployed in Poland in march, 52.7% of that number women. Some large regional differences in the unemployment rate persist. The difference between the Poznan region in the west that boasts a joblessness rate of 4.9% and the Olsztyn region in the north is 9.2pp.
Unemployment stood as high as 14% in January 2014 but has been consistently dropping since. Poland’s labour market is expected to continue to tighten, prolonging conditions for upwards pressure on wages, which grew 4.2% in 2016 and 5.2% y/y in March.
Poland’s budget deficit was limited to just PLN2.3bn (€540mn) at the end of the first quarter, finance ministry announced on April 25.
The gap represents a mere 3.8% of the full year plan for 2017. The financial plan had assumed the deficit would constitute 9.8% of the target by this point in the year.
The strong performance comes on the back of higher than expected tax revenue. Income from tax collection rose 23.8% y/y to PLN80.2bn by the end of March, as it grew across all main categories.
Revenue from VAT expanded 40.6%, while corporate income tax reciepts grew 15.2%. Personal income tax brought in 4.8% more revenue, while excise duties and the country's betting and gambling tax provided a 3.1% boost.
Poland’s budget assumes a full year deficit of PLN59.3bn in 2017, or 2.9% of GDP. That would constitute an increase of 0.4pp against 2016. and put Poland closer to the 3% threshold on the EU’s Excessive Deficit Procedure, from which Warsaw escaped only in 2015.
The raised target is the result of the government's social spending plans, which include the Family 500+ child benefit scheme. In October, the retirement age will be slashed.
Analysts warn that slower economic growth risks pushing the deficit over target. However, the economy boomed in the first quarter of the year.
Polish budget trumps target in first quarter
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