The average salary in Poland grows by 12,7% in August 2022

Average salary in the enterprise sector in Poland increased in August this year. by 12,7% compared to August 2021. It's below the foot inflationwhich in August this year. was 16,1%. It is also below market expectations (analysts forecasted an increase of 13,9%). The increase in wages is clearly accelerating, in August 2021. salaries grew at a rate of 9,5%, and in August 2020 only 4,1%. In monthly terms, we see a decline in the average salary by 2,9% (this is the result of the reversal of one-off increases in salaries in July this year in the mining, forestry and energy sectors). 

Inflation is rising faster than wages

In addition to monthly salaries (in the enterprise sector for entities employing 10 or more people), the Central Statistical Office also provides the average monthly salary on a quarterly basis in the national economy (according to the latest available data for Q2 2022 it was PLN 6,156.25).

Average monthly salary in the enterprise sector and in the national economy. Source: own study, GUS.

From the point of view of data on wages, the most important is how much allowances and inflation payments contribute to wage growth. Such inflationary allowances may still be of a one-off nature, but they may also quickly turn into permanent inflation indexation (i.e. to what extent the high level of inflation has already led to structural changes in the labor market in the form of permanent wage indexation mechanisms - which, of course, will have an impact on inflation remaining in the higher level). In July this year. part of the salary increase in the mining industry was caused by inflation bonuses (the average salary in the mining industry increased in July this year by 26% compared to June this year, while in August this year it fell by 33,6% - but, for example, it is still higher by 17% compared to May this year). 

Currently, the highest average salaries are in the "Information and communication" industry - PLN 11,192.76. The second industry with the highest salaries is "Mining and mining" with an average salary of PLN 9,944.69.

Average monthly salary, breakdown by type of activity, PKD 2007. Source: own study, Central Statistical Office.

The current inflation in Poland in August 2022. was 16,1% on an annual basis. Only in one industry (transport) the increase in the average wage was higher than the inflation rate. In the case of monthly inflation (in August 2022, the monthly change in inflation was + 0,8%), the situation is similar, because only in one industry the growth  the salary was higher than the monthly inflation (professional, scientific and technical activities). 

Average monthly salary, year-on-year change, breakdown by type of activity, PKD 2007. Source: own study, Central Statistical Office.

Average monthly salary, monthly change in August 2022 (compared to July 2022). Source: own study, GUS.

Finally, let's look at the change in the average salary in annual terms and the latest forecast of salary growth published by the NBP in July this year. According to the projection NBP The increase in the average salary in Q3 2022 is to be 11,2% (year on year) and at the end of the projection period, i.e. in Q4 2024, it is to drop to 5,7%. Knowing today the monthly data for July and August this year. it can be stated that the NBP forecast is a bit outdated. Rather, it seems that we are going for a salary increase in Q3 of 12-14% rather than 11,2%. Higher wage growth may translate into higher inflation. 

Annual change in the average salary compared to the July NBP projection. Source: own study, GUS, National Bank of Poland.

Author: Jarosław Jamka, Chief Investment Officer, WealthSeed