Poland Macro Weekly: Waiting for a new (majority) government

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TOP MACRO THEME(S):

• Monetary policy went into hibernation (p.2) – The MPC left interest rates unchanged at 5.75%. NBP rates will likely remain in hibernation during winter, and a possible awakening may take place in March, when some of the (fiscal) uncertainty dissipates and the NBP reveals the next projection (incl. 2026).

WHAT ELSE CAUGHT OUR EYE:

• Registered unemployment rate remained at 5.0% in November, on MinLab estimate. The increase in the number of unemployed (+4.4k to 774.8k) was relatively small compared to the seasonal pattern. The number of vacancies reported in November and those remaining in the register at the end of the month continued to decline (by 2.8% y/y and 5.5% y/y, respectively), but this decline has recently slowed down significantly. Seasonal factors will likely push unemployment rate up by 0.1-0.2pp in December, but still it will remain close to the all-time low. Labour market proves to be resilient to economic slowdown and high interest rates.
• The S&P affirmed Poland's rating at A- with stable outlook. The main risks for Poland's credit risk profile include a slower-than-expected decline in inflation, loss of credibility in the monetary policy, deterioration of the competitiveness of the economy and weaker economic growth. Reasons for an increase in the rating could include a sustained improvement in the quality of institutions and governance, leading to a steady inflow of EU funds and FDIs, as well as a faster fiscal consolidation.

THE WEEK AHEAD:

• Tusk may present his government’s program on December 12. According to President’s aide, D.Tusk can be sworn in as the new Prime Minister on December 13 or 14.
• We expect yet another CAB surplus in October, as exports outperform imports, despite both declining in y/y terms. In 12-m rolling terms the surplus has likely went up to 0.8% of GDP.
• Detailed CPI data will show factors standing behind substantial weakening of core inflation momentum in November

NUMBER OF THE WEEK:

1.13 million – number of foreigners in the social security system in Nov. (+6.3% y/y). The share of Ukrainians is the lowest since March 2017, at 67.5%.

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