Poland's wage growth stabilising at around 7 pct, MPC may both observe and cut rates further (opinion)
Poland's wage growth is stabilising at around 7 percent, although it may be difficult for it to fall any lower, which is an argument for the Monetary Policy Council both to monitor the real economy and to make further interest rate cuts, according to economists.
As the analysts at Millennium lender pointed out, in September alone, Poland's average employment fell by 9,000 persons on a monthly basis, with the declines concentrated primarily in trade and industry.
"These data complete the picture for the third quarter of 2025, in which employment in the enterprise sector continued its slight downward trend," they wrote in an e-mail.
"In our opinion, this is the result of labour demand adjusting to economic activity, which remains lower than at the peak of the previous economic cycle. We do not expect this trend to reverse in the coming months. We will have to wait for foreign demand to improve before this happens. At the same time, employment expectations are improving," the experts added.
The analysts assessed that the stabilisation of CPI inflation in the coming months will contribute to the stabilisation of annual wage growth.
"We expect a further slowdown in wage growth, but only after the new year, which will be influenced by a significantly lower increase in the minimum wage than in recent years," Millennium analysts wrote.
They emphasised that in their view, although the September data set is important, the macroeconomic projection with key wage and core inflation forecasts will be more significant for Poland's MPC members.
"At this point, we do not see any strong arguments for the need to cut interest rates as early as November," they assessed.
"However, we would like to point out that these expectations are uncertain, and the Council may decide to cut rates at the beginning of next month, which could end this cycle of monetary policy easing," they added.
Monika Kurtek, the chief analyst at Bank Pocztowy, assessed that the labour market data for September come as no surprise.
"We can talk about stabilisation in both the rate of wage growth in the enterprise sector and the rate of decline in employment. For the third month in a row, wage growth has been in the 7 range, rather than 8 or 9, which indicates a levelling off of trends in this area," she pointed out.
"In the coming months, until the end of this year, nominal wage growth in the enterprise sector is likely to remain at a similar pace. At the same time, due to slowing inflation, real wage growth is accelerating slightly (...) which allows for optimism about the pace of household consumption growth," she added.
In Kurtek's view, September labour market data are likely to reinforce the conviction of most MPC members that the decision to cut interest rates in October was the right one, while at the same time prompting the Council to monitor the situation in the coming months.
"I do not expect any further interest rate cuts until the end of this year," the economist stated.
The analysts at listed lender ING BSK assessed in an e-mail that the solid growth in manufacturing activity and increased wage growth in this sector are factors that may prompt the Monetary Policy Council to refrain from another interest rate cut in November, pending further economic data.
"At the same time, weakening wage pressure in services and an unfavourable outlook for the industrial sector leave room for further monetary policy easing in the future," they added.
"We expect the National Bank of Poland (NBP) interest rates to remain unchanged until the end of 2025, and in 2026, the Council to reduce the reference rate by a further 50 basis points to 4.00 percent at the end of next year," the experts forecast.
The analysts’ team at Pekao lender pointed out that Poland's wage growth in September was in line with their forecast and stable at a low level after August's reading of 7.1 percent, the lowest in over three years.
"This picture of wage pressure remains a solid argument for the Monetary Policy Council to continue cutting interest rates," they assessed on X.
The analysts of mBank lender stated that they remain sceptical about the possibility of wage growth to permanently fall below 7 percent.
"Higher GDP growth will boost demand for labour. Supply (with the right qualifications) will remain limited. This is one of the elements of our scenario that will not allow for a permanent reduction in inflation in services," they assessed on X.
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Poland's stats office GUS reported earlier on Monday that the average gross salary in the enterprise sector in September 2025 was PLN 8,750.34 (EUR 2,064.21), which represents a year-on-year increase of 7.5 percent, in line with the PAP Biznes consensus. Employment in this sector fell by 0.8 percent year on year, also in line with the market expectations.
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