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Monday, December 17, 2007

Poland Wages November 2007

Polish average corporate wages advanced in November at the fastest pace in more than seven years, suggesting very rapid economic growth and large scale out migration of key age group workers may be squeezing the labour market more than people imagined, and provoking a sharp rise in inflation. Wages rose at an annual 12 percent rate (and 4.8 percent from a month earlier) to 3,092.01 zloty, according to the Warsaw-based Central Statistical Office earlier today.

The central bank-led Monetary Policy Council last month raised its key seven-day reference rate for a fourth time this year in an attempt to contain inflation. The November inflation rate rose to 3.6 percent, above the upper end of the central bank's target range of 1.5-2.5 percent. The Monetary Policy Council will start its monthly two-day meeting tomorrow, but the bank is in something of a double bind here, since raising interest rates will only attract more capital inflows in the short term, and more capital is not what Poland needs, since it is this capital looking for people to employ that is provoking the overheating, in Poland and across the EU 10.

Employment in the private sectors also grew by 5 percent from November 2006, rising 0.3 percent on the month to a new total of 5.3 million. The zloty traded at 3.618 per euro at 2:40 p.m. today, unchanged from before the report and from Friday.

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