Bloomberg News

Polish Jobs, Wage Growth Slows, Pointing to Unchanged Rates

May 18, 2012

Polish jobs growth at companies with more than nine workers slowed along with wages, reinforcing arguments for interest rates to remain unchanged after the central bank became the first in the European Union this year to raise borrowing costs.

Corporate employment increased 0.3 percent from a year earlier after growing 0.5 percent in March, the Warsaw-based Central Statistical Office said today. That’s below the 0.5 percent median estimate of 23 economists in a Bloomberg survey. Hiring fell 0.1 percent from the previous month.

The Narodowy Bank Polski raised its main rate by a quarter-point to 4.75 percent on May 9, the first increase since last June. Higher borrowing costs “do not appear warranted” given government forecasts that inflation will ease this year as economic growth slows to 2.5 percent from 4.3 percent in 2011, the International Monetary Fund said this week.

“The data confirm that the economic slowdown has arrived,” Tomasz Kaczor, chief economist at Bank Gospodarstwa Krajowego in Warsaw, wrote in an e-mail after the release. “While the central bank ignored figures pointing to a slowdown earlier this month, this time they won’t remain indifferent. The deterioration in some categories is too obvious.”

Zloty Weakens

The zloty weakened to 4.3394 per euro at 2:33 p.m. in Warsaw from 4.3327 before the release, paring its gain from yesterday to 0.3 percent. The yield on the five-year government bond was 5.021 percent, down 3 basis points from yesterday.

Average gross wages advanced 3.4 percent from a year earlier in April after a 3.8 percent rise the previous month, the statistics office said in a separate release. That compares with a 3.9 percent median forecast of 27 economists in a Bloomberg survey. Wages fell 1.3 percent from March.

Wages failed to grow faster than consumer prices for a third month for the first time since November 2009. Consumer price growth accelerated to 4 percent from a year earlier in April, compared with 3.9 percent in March.

“Wage growth is lagging significantly behind inflation and shows employees have lost their bargaining power,” BGK’s Kaczor wrote in the research note.

To contact the reporter on this story: Dorota Bartyzel in Warsaw at

To contact the editor responsible for this story: Balazs Penz at

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