{"id":55842,"date":"2025-01-03T12:28:17","date_gmt":"2025-01-03T11:28:17","guid":{"rendered":"https:\/\/bpcc.org.pl\/?p=55842"},"modified":"2025-01-07T09:02:05","modified_gmt":"2025-01-07T08:02:05","slug":"macroeconomic-overview-end-2024","status":"publish","type":"post","link":"https:\/\/dev2.bpcc.org.pl\/pl\/macroeconomic-overview-end-2024\/","title":{"rendered":"Macroeconomic overview, end- 2024"},"content":{"rendered":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
CPI inflation<\/strong><\/td>\n(y\/y, Nov 24, GUS, final)<\/td>\n4.7%<\/td>\n<\/tr>\n
Unemployment<\/strong><\/td>\n(claimant rate Nov 24, GUS)<\/td>\n5.0%<\/td>\n<\/tr>\n
Unemployment<\/strong><\/td>\n(econ. inactive, Eurostat, Oct 24)<\/td>\n3.1%<\/td>\n<\/tr>\n
GDP growth 2023<\/strong><\/td>\n(y\/y GUS, final)<\/td>\n0.1%<\/td>\n<\/tr>\n
GDP growth latest <\/strong><\/td>\n(y\/y to Q3 24 preliminary, GUS)<\/td>\n2.7%<\/td>\n<\/tr>\n
GDP growth 2025 forecast<\/strong><\/td>\n(OECD, Dec 24)<\/td>\n3.4%<\/td>\n<\/tr>\n
Retail sales<\/strong><\/td>\n(y\/y to Nov 24, GUS)<\/td>\n3.1%<\/td>\n<\/tr>\n
Export of goods<\/strong><\/td>\n(H1 24, down 3.3% on H1 23, GUS)<\/td>\n\u20ac174 billion<\/td>\n<\/tr>\n
Import of goods<\/strong><\/td>\n(H1 24, down 2.1% on H1 23, GUS)<\/td>\n\u20ac169 billion<\/td>\n<\/tr>\n
Average wages (private sector, monthly, gross)<\/strong><\/td>\n(GUS, Nov 24 \u2013 up 10.5% y-o-y)<\/td>\n8,478 PLN
\n(=\u20ac1,980 \/ \u00a31,650)<\/td>\n<\/tr>\n
Statutory Minimum Wage (full-time, monthly, gross)<\/strong><\/td>\n(from Jan 25; up 10.0% from Jan 24)<\/td>\n4,666 PLN
\n(=\u00a31,100 \/ \u00a3900)<\/td>\n<\/tr>\n
NBP reference rate<\/strong><\/td>\n(last changes Sep & Oct 2023,
\n100 basis-point cut in total)<\/td>\n		5.75%<\/td>\n<\/tr>\n
Industrial output<\/strong><\/td>\n(year-on-year, Nov 24, GUS)<\/td>\n-1.5%%<\/td>\n<\/tr>\n
Construction output<\/strong><\/td>\n(year-on-year, Nov 24, GUS)<\/td>\n-9.3%<\/td>\n<\/tr>\n
PLN as of 31 Dec, NBP rate<\/strong><\/td>\n\u00a31 = 5.1488; \u20ac1 = 4.2730; \u00a0$1 = 4.1012<\/td>\n<\/tr>\n
PMI<\/strong><\/td>\nDec 24: 48.2 (down from 48.9 in Nov)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Commentary<\/strong><\/p>\n

Taking the big-picture view, can one say that the overall macroeconomic situation in Poland is improving or getting worse? On the one hand, Poland\u2019s economy is growing at an admirable pace (and seems set to accelerate into 2025); unemployment is among the lowest in the EU; overall productivity has been growing much faster than in the Eurozone; and domestic consumption remains strong (though patchy). On the other, inflation \u2013 in particular wage inflation \u2013 remains stubbornly high, leading to high borrowing costs for business, while recruitment and retention is a major issue for employers. Manufacturing industry is experiencing the longest run of negative PMI readings (32 months in a row under the neutral score of 50). Germany \u2013 Poland\u2019s largest export market \u2013 isn\u2019t doing well economically.<\/p>\n

So which is it \u2013 is it good or bad?<\/p>\n

Poland\u2019s GDP growth in the year to Q3 2024 was 2.7%, down from 3.2% in the year to Q2. While the figures \u2013 reflecting lower investment and consumption \u2013 were disappointing analysts still expect a Q4 bound-back. CPI inflation fell in November to 4.7%, down from October\u2019s 5.0%, but again a bounce back is expected in December, with inflation expected to peak around 5.2% in Q1 2025, before weakening in H2 2025, once the base effect of the ending of the energy price cap works through. Core inflation has started falling, so by the end of 2025, the central bank should begin the cycle of lowering base rates.<\/p>\n

Poland\u2019s registered unemployment fell to a record low of 4.9% in October 2024 before returning to 5.0%. On the EU\u2019s measure of economic inactivity, Poland\u2019s is now the third-lowest in the EU at 3.1% after Czechia and Malta. Real wage growth, which has been a major macroeconomic factor since the mid-teens, though slower than in previous months \u2013 continues to put more money in consumers\u2019 pockets. The politically driven minimum wage is seen as problematic by manufacturers with large blue-collar workforces. From 1 January 2025, the statutory minimum wage rose by a further 8.5% from 4,300 z\u0142 a month gross to 4,666z\u0142 (from 1 July 2024), and up 10.0% from the 4,242z\u0142 it was on 1 January 2024, while inflation rose by around 5%.<\/p>\n

Although the Polish government, formed in Autumn 2023, is seen as more business-friendly in its rhetoric, it is still difficult to point to specific improvements in the overall business environment \u2013 other than ending the stream of unpredictable and poorly considered legislation pumped out during the previous parliament. However, given the fact that the government is, in effect, a coalition of three coalitions, and that the president represents the parliamentary opposition, this state of affairs is to be expected. The presidential election takes place in May 2025.<\/p>\n

Questions facing investors in Poland centre around the future of Russian aggression; an end to hostilities would signal a major reconstruction boom in Ukraine, with Poland a natural logistics platform and partner for that process. Another area of uncertainty is the state of Western Europe\u2019s \u2013 specifically Germany\u2019s \u2013 economic prospects, as Poland\u2019s manufacturing depends heavily on those markets. Trade in goods for the first half of 2024 show Poland with a tiny surplus of \u20ac4.6 billion; the value of goods exported falling faster than that of imports. As of the first nine months of 2024, the UK is Poland\u2019s only Top Five export market to be growing both in value and in terms of its share in the overall structure of Polish exports.<\/p>\n

Demographics and the labour market<\/strong><\/p>\n

Unemployment is likely to stay near record low levels; while firms are less likely to be recruiting this year, fewer young Poles will be entering the labour market. Wage pressure is likely to continue as retention of skilled employees continues to be a big worry for firms. Poland\u2019s largest age cohort, born in 1983, reaches the age of 42 this year (around 700,000 people); compare this demographic high-water mark to the number of 22-year-olds, born in 2003 \u2013 a mere 350,000. The number of labour-market entrants will continue to fall (fewer than 300,000 Poles were born in 2024).<\/p>\n

Poland\u2019s unemployment is lowest in the cities and highest in rural areas. More than half of the long-term unemployed live in villages. Big disparities exist between cities where unemployment is extremely low (Katowice 1.0%, Pozna\u0144 1.0%, Warsaw 1.4%, Wroc\u0142aw 1.6%, Krak\u00f3w 2.0%, and Gda\u0144sk 2.6%), and small provincial towns where it remains in double digits. Szyd\u0142owiec district, 120km south of Warsaw, also in Mazowsze province, holds the record for Poland at 23.1%. Nearby Radom, a city of 200,000 people, also has high unemployment at 9.4%. New investors might wish to consider university cities such as \u0141\u00f3d\u017a (4.4%), Rzesz\u00f3w (4.0%), Lublin (4.0%) or Kielce (4.5%). All data from November 2024.<\/p>\n

Unemployment fell in November in Pozna\u0144, \u0141\u00f3d\u017a, Gda\u0144sk and Radom (down 0.1 percentage point), rose in Lublin (up 0.1 percentage point); in all other cities it\u2019s stable.<\/p>\n

The zloty
\n<\/strong><\/p>\n

Although Poland notionally signed up to join the eurozone as part of its EU Accession Treaty, there was no mention of when, or at what rate. To do so, Poland must alter its constitution, which needs a two-thirds parliamentary majority. So Poland continues to linger on the fringes of the EU\u2019s core \u2013 and \u2013 importantly for its manufactured exports \u2013 it can control the competitiveness of its currency. The Brexit referendum resulted in a dramatic fall in value of the pound against the zloty. From June to October 2016, the pound fell from 5.60z\u0142 to 4.80z\u0142, a 14% drop. Since then, it has recovered; fluctuations result more from political turbulence than macroeconomic fundamentals. Over the past month, the zloty\/pound rate has strengthened against the pound, trading in the band 5.12z\u0142 and 5.19z\u0142 to the pound.<\/p>\n

A weaker zloty makes Polish exports more competitive as well as boosting Poland\u2019s attractiveness as a location for inbound foreign direct investment.<\/p>\n

UK-Polish trade<\/strong><\/p>\n

On the surface, Brexit has not hampered trade between Poland and the UK, with 2023 seeing record values of goods and services traded between the two economies. However, UK exports to Poland now include significant sales of fossil fuels substituting those Poland used to buy from Russia. Polish export growth to the UK mainly comes from larger exporters successfully replacing goods from Western European SMEs which no longer trade with the UK because of frictions arising due to the UK\u2019s departure from the single European market and Customs Union. These have made it much harder for small business to trade profitably with a third country.<\/p>\n

Links:<\/strong><\/p>\n

GUS<\/a> (Statistics Poland) English-language pages
\nCentral Bank of Poland<\/a> English-language pages
\nEurostat<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

CPI inflation (y\/y, Nov 24, GUS, final) 4.7% Unemployment (claimant rate Nov 24, GUS) 5.0% Unemployment (econ. inactive, Eurostat, Oct 24) 3.1% GDP growth 2023 (y\/y GUS, final) 0.1% GDP growth latest (y\/y to Q3 24 preliminary, GUS) 2.7% GDP growth 2025 forecast (OECD, Dec 24) 3.4% Retail sales (y\/y to Nov 24, GUS) 3.1% […]<\/p>\n","protected":false},"author":1,"featured_media":24251,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
CPI inflation<\/strong><\/td>\r\n(y\/y, Nov 24, GUS, final)<\/td>\r\n4.7%<\/td>\r\n<\/tr>\r\n
Unemployment<\/strong><\/td>\r\n(claimant rate Nov 24, GUS)<\/td>\r\n5.0%<\/td>\r\n<\/tr>\r\n
Unemployment<\/strong><\/td>\r\n(econ. inactive, Eurostat, Oct 24)<\/td>\r\n3.1%<\/td>\r\n<\/tr>\r\n
GDP growth 2023<\/strong><\/td>\r\n(y\/y GUS, final)<\/td>\r\n0.1%<\/td>\r\n<\/tr>\r\n
GDP growth latest <\/strong><\/td>\r\n(y\/y to Q3 24 preliminary, GUS)<\/td>\r\n2.7%<\/td>\r\n<\/tr>\r\n
GDP growth 2025 forecast<\/strong><\/td>\r\n(OECD, Dec 24)<\/td>\r\n3.4%<\/td>\r\n<\/tr>\r\n
Retail sales<\/strong><\/td>\r\n(y\/y to Nov 24, GUS)<\/td>\r\n3.1%<\/td>\r\n<\/tr>\r\n
Export of goods<\/strong><\/td>\r\n(H1 24, down 3.3% on H1 23, GUS)<\/td>\r\n\u20ac174 billion<\/td>\r\n<\/tr>\r\n
Import of goods<\/strong><\/td>\r\n(H1 24, down 2.1% on H1 23, GUS)<\/td>\r\n\u20ac169 billion<\/td>\r\n<\/tr>\r\n
Average wages (private sector, monthly, gross)<\/strong><\/td>\r\n(GUS, Nov 24 \u2013 up 10.5% y-o-y)<\/td>\r\n8,478 PLN\r\n(=\u20ac1,980 \/ \u00a31,650)<\/td>\r\n<\/tr>\r\n
Statutory Minimum Wage (full-time, monthly, gross)<\/strong><\/td>\r\n(from Jan 25; up 10.0% from Jan 24)<\/td>\r\n4,666 PLN\r\n(=\u00a31,100 \/ \u00a3900)<\/td>\r\n<\/tr>\r\n
NBP reference rate<\/strong><\/td>\r\n(last changes Sep & Oct 2023,\r\n100 basis-point cut in total)<\/td>\r\n5.75%<\/td>\r\n<\/tr>\r\n
Industrial output<\/strong><\/td>\r\n(year-on-year, Nov 24, GUS)<\/td>\r\n-1.5%%<\/td>\r\n<\/tr>\r\n
Construction output<\/strong><\/td>\r\n(year-on-year, Nov 24, GUS)<\/td>\r\n-9.3%<\/td>\r\n<\/tr>\r\n
PLN as of 31 Dec, NBP rate<\/strong><\/td>\r\n\u00a31 = 5.1488; \u20ac1 = 4.2730; \u00a0$1 = 4.1012<\/td>\r\n<\/tr>\r\n
PMI<\/strong><\/td>\r\nDec 24: 48.2 (down from 48.9 in Nov)<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nCommentary<\/strong>\r\n\r\nTaking the big-picture view, can one say that the overall macroeconomic situation in Poland is improving or getting worse? On the one hand, Poland\u2019s economy is growing at an admirable pace (and seems set to accelerate into 2025); unemployment is among the lowest in the EU; overall productivity has been growing much faster than in the Eurozone; and domestic consumption remains strong (though patchy). On the other, inflation \u2013 in particular wage inflation \u2013 remains stubbornly high, leading to high borrowing costs for business, while recruitment and retention is a major issue for employers. Manufacturing industry is experiencing the longest run of negative PMI readings (32 months in a row under the neutral score of 50). Germany \u2013 Poland\u2019s largest export market \u2013 isn\u2019t doing well economically.\r\n\r\nSo which is it \u2013 is it good or bad?\r\n\r\nPoland\u2019s GDP growth in the year to Q3 2024 was 2.7%, down from 3.2% in the year to Q2. While the figures \u2013 reflecting lower investment and consumption \u2013 were disappointing analysts still expect a Q4 bound-back. CPI inflation fell in November to 4.7%, down from October\u2019s 5.0%, but again a bounce back is expected in December, with inflation expected to peak around 5.2% in Q1 2025, before weakening in H2 2025, once the base effect of the ending of the energy price cap works through. Core inflation has started falling, so by the end of 2025, the central bank should begin the cycle of lowering base rates.\r\n\r\nPoland\u2019s registered unemployment fell to a record low of 4.9% in October 2024 before returning to 5.0%. On the EU\u2019s measure of economic inactivity, Poland\u2019s is now the third-lowest in the EU at 3.1% after Czechia and Malta. Real wage growth, which has been a major macroeconomic factor since the mid-teens, though slower than in previous months \u2013 continues to put more money in consumers\u2019 pockets. The politically driven minimum wage is seen as problematic by manufacturers with large blue-collar workforces. From 1 January 2025, the statutory minimum wage rose by a further 8.5% from 4,300 z\u0142 a month gross to 4,666z\u0142 (from 1 July 2024), and up 10.0% from the 4,242z\u0142 it was on 1 January 2024, while inflation rose by around 5%.\r\n\r\nAlthough the Polish government, formed in Autumn 2023, is seen as more business-friendly in its rhetoric, it is still difficult to point to specific improvements in the overall business environment \u2013 other than ending the stream of unpredictable and poorly considered legislation pumped out during the previous parliament. However, given the fact that the government is, in effect, a coalition of three coalitions, and that the president represents the parliamentary opposition, this state of affairs is to be expected. The presidential election takes place in May 2025.\r\n\r\nQuestions facing investors in Poland centre around the future of Russian aggression; an end to hostilities would signal a major reconstruction boom in Ukraine, with Poland a natural logistics platform and partner for that process. Another area of uncertainty is the state of Western Europe\u2019s \u2013 specifically Germany\u2019s \u2013 economic prospects, as Poland\u2019s manufacturing depends heavily on those markets. Trade in goods for the first half of 2024 show Poland with a tiny surplus of \u20ac4.6 billion; the value of goods exported falling faster than that of imports. As of the first nine months of 2024, the UK is Poland\u2019s only Top Five export market to be growing both in value and in terms of its share in the overall structure of Polish exports.\r\n\r\nDemographics and the labour market<\/strong>\r\n\r\nUnemployment is likely to stay near record low levels; while firms are less likely to be recruiting this year, fewer young Poles will be entering the labour market. Wage pressure is likely to continue as retention of skilled employees continues to be a big worry for firms. Poland\u2019s largest age cohort, born in 1983, reaches the age of 42 this year (around 700,000 people); compare this demographic high-water mark to the number of 22-year-olds, born in 2003 \u2013 a mere 350,000. The number of labour-market entrants will continue to fall (fewer than 300,000 Poles were born in 2024).\r\n\r\nPoland\u2019s unemployment is lowest in the cities and highest in rural areas. More than half of the long-term unemployed live in villages. Big disparities exist between cities where unemployment is extremely low (Katowice 1.0%, Pozna\u0144 1.0%, Warsaw 1.4%, Wroc\u0142aw 1.6%, Krak\u00f3w 2.0%, and Gda\u0144sk 2.6%), and small provincial towns where it remains in double digits. Szyd\u0142owiec district, 120km south of Warsaw, also in Mazowsze province, holds the record for Poland at 23.1%. Nearby Radom, a city of 200,000 people, also has high unemployment at 9.4%. New investors might wish to consider university cities such as \u0141\u00f3d\u017a (4.4%), Rzesz\u00f3w (4.0%), Lublin (4.0%) or Kielce (4.5%). All data from November 2024.\r\n\r\nUnemployment fell in November in Pozna\u0144, \u0141\u00f3d\u017a, Gda\u0144sk and Radom (down 0.1 percentage point), rose in Lublin (up 0.1 percentage point); in all other cities it\u2019s stable.\r\n\r\nThe zloty\r\n<\/strong>\r\n\r\nAlthough Poland notionally signed up to join the eurozone as part of its EU Accession Treaty, there was no mention of when, or at what rate. To do so, Poland must alter its constitution, which needs a two-thirds parliamentary majority. So Poland continues to linger on the fringes of the EU\u2019s core \u2013 and \u2013 importantly for its manufactured exports \u2013 it can control the competitiveness of its currency. The Brexit referendum resulted in a dramatic fall in value of the pound against the zloty. From June to October 2016, the pound fell from 5.60z\u0142 to 4.80z\u0142, a 14% drop. Since then, it has recovered; fluctuations result more from political turbulence than macroeconomic fundamentals. Over the past month, the zloty\/pound rate has strengthened against the pound, trading in the band 5.12z\u0142 and 5.19z\u0142 to the pound.\r\n\r\nA weaker zloty makes Polish exports more competitive as well as boosting Poland\u2019s attractiveness as a location for inbound foreign direct investment.\r\n\r\nUK-Polish trade<\/strong>\r\n\r\nOn the surface, Brexit has not hampered trade between Poland and the UK, with 2023 seeing record values of goods and services traded between the two economies. However, UK exports to Poland now include significant sales of fossil fuels substituting those Poland used to buy from Russia. Polish export growth to the UK mainly comes from larger exporters successfully replacing goods from Western European SMEs which no longer trade with the UK because of frictions arising due to the UK\u2019s departure from the single European market and Customs Union. These have made it much harder for small business to trade profitably with a third country.\r\n\r\nLinks:<\/strong>\r\n\r\nGUS<\/a> (Statistics Poland) English-language pages\r\nCentral Bank of Poland<\/a> English-language pages\r\nEurostat<\/a>","_et_gb_content_width":"","footnotes":""},"categories":[56,58],"tags":[],"ppma_author":[308],"class_list":["post-55842","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-reports","author-bpcc_en","et-has-post-format-content","et_post_format-et-post-format-standard"],"_vci_translations":{"en":55842},"_vci_seo":[],"_vci_author":{"id":1,"name":"Wojciech K.","slug":"n0timportant"},"acf":[],"authors":[{"term_id":308,"user_id":0,"is_guest":1,"slug":"bpcc_en","display_name":"British Polish Chamber of Commerce","avatar_url":{"url":"https:\/\/dev2.bpcc.org.pl\/wp-content\/uploads\/2023\/01\/Vertical_logotype_red_crown_transparent.png","url2x":"https:\/\/dev2.bpcc.org.pl\/wp-content\/uploads\/2023\/01\/Vertical_logotype_red_crown_transparent.png"},"first_name":"","last_name":"","user_url":"","description":"Since 1992, the British-Polish Chamber of Commerce has been working on behalf of its member companies in two areas - business development and the business environment. By offering extensive networking opportunities - at events and through its digital media - the BPCC helps to connect companies for mutual tangible benefits. \r\n\r\nThe BPCC is the first point of contact for all investors who see Poland as a convenient location to start an investment. 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