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Monday, March 17, 2008

Poland Wages and Salaries Januuary 2008

Polish average corporate wages rose in February an annual rate 12.8 percent. This was the fastest rate of increase registered in almost eight years, adding to expectations the central bank will raise interest rates next week. Month on month wages rose 2.1 percent, according to data from the Central Statistical Office earlier today.

The quarterly average nominal hourly rate chart possibly gives a better idea of what is happening, as it irons out some of the monthly fluctuation.

Clearly a number of factors are at work here, but among them the fact that the labour market is steadily tightening, as employment rises:

and unemployment steadily falls:

Policy makers are considered to be likely to raise the interest rate by a quarter of a percentage point to 5.75 percent at the next meeting on March 25-26. If this expectation is fulfilled it will be the third rate increase this year as policy makers seek to slow inflation to the central bank's 2.5 percent target.

In February, the inflation rate rose to 4.2 percent and may start returning to the target at the end of next year, central bank Governor Slawomir Skrzypek said on March 11.

The Statistical Office also said employment in February grew 5.9 percent from February 2007 and increased 0.4 percent from January.

The zloty traded at 3.5474 per euro at 2:30 p.m. in Warsaw, little changed from earlier in the morning and down from 3.535 on Friday, but this change may have more to do with global conditions this morning than with domestic Polish data. Yield on the government's five-year bond rose 6 basis point to 6.316 percent.

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