Page 10 - Poland Outlook 2024

That said, analysts expect employment growth to be moderate in 2024 due to increasing labour costs following a substantial hike in the minimum wage, which went up nearly 18% by law as of January 1, with another hike penciled in midway through the year. Some 3.6mn out of 13.5mn full-time employees – nearly 27% of the total – will benefit, a higher figure than in other European economies.
The new government also promised significant salary increases in education and, to a lesser extent, in the budget sector.
Overall, wage growth in the national economy in 2024 is expected to come in at 9.9%, with some analysts suggesting that it will gradually slow down as inflation decreases.
Unemployment is likely to remain low, and in our opinion, there will be sustained wage pressure, especially among workers with high and unique qualifications. In certain industries such as services and trade, companies may still face a significant labour supply barrier.
“We assume that companies will be reluctant to increase the share of labour in total costs, as protecting profit margins will be more challenging in conditions of lower inflation,” PKO BP said in an analysis.
“This is consistent with the results of the NBP Quick Monitoring, which indicate a decrease in the percentage of companies expecting to increase wages in the next 12 months to 37.9% from 42.4% in the previous survey round. These values exceed the long-term average, reinforcing the belief that wage dynamics in 2024 will be significantly higher than the long-term average. This will pose a significant challenge for the return of inflation to the target,” PKO BP also said.
A significant barrier to employment growth will be structural limits linked to supply-side shortages due to Poland’s ageing population and a decreasing net inflow of foreign workers.
Risks to the labour market forecasts include the scale of the impact of announced salary increases in the public sector and the minimum wage increase on the wage structure, the level of inflation and the intensity of wage demands, and the scale of migration, analysts note.
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