Poland Macro Weekly: Dark clouds are drifting away

TOP MACRO THEME(S):

Consumer is on the mend – The end of the summer brought better than expected data from the consumer segment, reinforcing our belief that the dark clouds above consumers’ heads are slowly drifting away.

WHAT ELSE CAUGHT OUR EYE:

Core inflation in August declined to 10.0% y/y from 10.6% in July. Its annualised m/m growth corresponds to inflation rate of approx. 7%, still way above the NBP’s inflation target, although a range of core inflation measures remains on a downward path.
Industrial production declined by 2.0% in August against -2.3% y/y in July. Higher dynamics stemmed most likely from a rebound in the oil industry (data are subject to statistical secrecy) and in the chemical industry. Meanwhile, producer prices fell more profoundly than in July – PPI decreased to -2.8% y/y against -2.1% y/y in July. An upward surprise came from the construction output, which increased by 3.5% y/y last month.
Labour market continues to cool down, although wages hold on tight. Average wage in the enterprise sector increased by 11.9% y/y in August and by 1.7% in real terms – the highest real wage growth since Feb. 2022. Employment remained unchanged against August 2022, while its monthly decline was stronger than the seasonal pattern.
M3 growth in August decelerated to 7.3% from 8.0% y/y. PLN-denominated loans dynamics was the lowest since data is available (1997).
Prime minister, M.Morawiecki, stated that the so-called mortgage loan holidays (enabling to partially suspend loan instalments) will be extended until 2024, subject to income criteria which are yet to be announced.

THE WEEK AHEAD:

Preliminary estimate of the CPI inflation for September (to be published on Friday) will eventually be single-digit. Monday will bring data on the unemployment rate in August, which we expect to stabilise at 5%.

NUMBER OF THE WEEK:

1 mn – number of foreigners insured in the Social Insurance Institution (ZUS) as of August (compared to almost 17mn working Poles).