Poland’s economy delivered mixed signals in the second quarter of 2025, with household incomes showing a modest improvement while corporate profitability came under strain. Data from the national statistics office show that households saw a slight increase in real earnings compared with the previous quarter. This was enough to support stronger spending, with per-person consumption rising more quickly. Families also put aside more money than in the first quarter, though their savings rate remains lower than a year ago. Average monthly pay continued to climb in real terms, underpinned by steady wage growth, helping to boost purchasing power. On the business side, non-financial companies faced a squeeze. Profitability slipped compared with both the start of the year and the same period in 2024. Rising labour costs were the main driver, increasing at a pace well above inflation. Despite this, investment activity was broadly steady on a quarterly basis, although lower than a year earlier. At the macroeconomic level, gross domestic product expanded by half a percent over the previous quarter and by 2.6 percent year-on-year. This matches other indicators pointing to moderate but continuing growth through the first half of the year. Consumer prices in September rose at an annual rate of 2.9 percent, close to the central bank’s target. Food remained one of the strongest upward pressures, though forecasts of larger harvests in 2025 may ease price growth in the coming months. The overall picture is one of resilience on the household side, where higher wages and steady employment are keeping consumption afloat, set against tighter margins in the corporate sector. With inflation cooling and output growth holding steady, the second half of the year will hinge on whether businesses can adjust to rising costs without cutting back investment. Source: GUS