Polish wage growth likely remained strong in August, industrial production to have fallen slightly

Polish wage growth data is set to release this week. According to an Erste Group Research, wage is likely to have grown 6.7 percent year-on-year in August, while employment is expected to have maintained the recent dynamics – slightly below 3 percent and at 2.6 percent year-on-year. The situation on the labor market continues to be favourable and underpins high levels of household spending.

Meanwhile, industrial production is likely to have been downplayed by the negative calendar effect and sentiment remaining depressed.

“We are a bit more optimistic than the market and expect industrial production growth at 1.8 percent y/y vs. the consensus at 1.3 percent y/y. If such low growth dynamics persist in September, we could see GDP dropping below 4 percent in 3Q19. Separately, price pressure remains sluggish and we see it at 1.3 percent y/y in August”, stated Erste Group Research.

On the other hand, the labor market and extension of the 500+ program is likely to have underpinned private consumption.

“We expect retail sales growth of 7 percent y/y in August (5.2 percent y/y in real terms)”, added Erste Group Research.