Poland sees job losses and slower wage growth in April, weighing on economic outlook

The April 2025 edition of the Prosperity Index (WD) indicates continued stagnation in economic sentiment, with only marginal movement compared to the previous month. The index has been following a downward trajectory since the beginning of the year, largely due to persistent job losses in the enterprise sector and ongoing inflationary pressures.

For the third consecutive month, employment in the enterprise sector has declined at an annual rate of 0.9%. Since January, the sector has shed approximately 10,000 full-time positions, underscoring continued weakness in the labor market. Analysts attribute this trend to a combination of cautious business sentiment, reduced hiring, and structural adjustments in several industries.

While wage growth remains relatively strong, it has shown signs of moderation. In March, average nominal wages in the enterprise sector rose by 7.7% year-on-year. However, this increase was outpaced by consumer price growth, resulting in a more modest 4.5% gain in real terms. This marks a slowdown in purchasing power improvement compared to earlier months.

The interplay between rising prices and slower wage growth is raising concerns about household consumption, a key driver of domestic demand. Economists warn that if employment continues to contract and real wage growth weakens further, broader economic activity could face additional headwinds in the second half of the year.

Despite some underlying resilience, the April data suggests the recovery remains uneven and vulnerable to both internal and external pressures. Policymakers are expected to monitor labor market and inflation developments closely as they consider adjustments to fiscal and monetary measures in the coming months.

Source: BIEC