Poland: wage and productivity growth aligned at last
In October, nominal wage growth decelerated from 7.5% to 6.6% year-on-year, bringing real wage growth down to 3.8% — broadly in line with the 3.7% yoy increase in real GDP in the third quarter, which serves as a proxy for productivity growth. This suggests that wage dynamics have moved into a range considered neutral for inflation (5–6% annually), effectively reducing wage-driven inflationary pressure. As a result, conditions are increasingly favorable for further monetary easing. In our view, the next interest rate cut by the Monetary Policy Council (RPP) could come as early as December.
The main source of the surprise was the public sector. In mining, wages were 1.6% lower than in October 2024 — the second consecutive negative reading for this struggling industry. In the energy sector, wage growth was symbolic, at just 1.3% y/y. Among more market-oriented sectors, a surprise was noted in transport and storage: 2.4% y/y. In other sectors, wage growth rates range between 7% and 9% y/y and show no signs of strong deceleration.
Currently, wages are slowing faster than inflation, and their real growth has decelerated to 3.8% y/y — which is now close to the real GDP growth rate (3.7% in Q3 2025), and thus roughly matches productivity growth. This means that wage growth is no longer exerting inflationary pressure. As a result, we can expect a slowdown in service price increases in Poland — the last lingering effect of the 2023 inflation spike. This opens the door for further normalization of monetary policy. We expect the RPP to lower interest rates for the fourth consecutive time in December.
In October, employment in the enterprise sector declined by another 5,000 jobs. From this perspective, 2025 is shaping up similarly to the previous year — which is not an encouraging sign. The overall economic recovery in Poland is not being accompanied by a strong labor market. While unemployment is not rising (excluding the impact of regulatory changes), the situation remains fragile. The gradual decline in employment across some industries (such as mining and manufacturing) is not being offset by sufficient job creation in other sectors.
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