Nicholas Richardson
News

Unemployment

“Far and away the best prize that life has to offer is the chance to work hard at work worth doing.” The words of Theodore Roosevelt, no stranger to hard work. Which is why unemployment, especially long–term unemployment, is so debilitating as it robs so many of the opportunity to win that prize. Which is why it is worth noting that despite the political turmoil elsewhere, it is worth noting at unemployment in Poland is at the lowest rate for 25 years.

Figures released by Poland’s central statistical office (GUS) show unemployment in June at the rate of 8.8 per cent, compared with 9.1 per cent in May. These figures are consistent with previous estimates from the labour ministry and suggest a steady monthly improvement. The fall is due both to a growth in seasonal work and a growth in demand reflecting economic growth. In human terms, this means that 1,392,500 people were registered as unemployed in labour offices last month, down from 1,456,900 in May.

Consistent with this this data, average wages in Poland’s business sector rose by 5.3 per cent year in the year to June, the best result since March 2015, and employment rose by 3.1 per cent. According to GUS, the average monthly gross salary in this sector was PLN 4,252.19 (EUR 969.22) which, with continuing deflation, has resulted in this rise real wages. Grzegorz Baczewski from the employers’ Lewiatan Confederation, said that a rapid rise in wages could continue for the rest of the year, with a further rise at the start of 2017 when a higher minimum wage comes into effect. And, as might have been expected, retail sales were up by 4.6 per cent in June, compared to 3.2 per cent in May and 6.5 per cent year on year.

Can the good news last? According to the IMF it can with Poland expected to see stable growth against a background downwardly revised global growth projections. While the IMF’s latest World Economic Outlook report points to the destabilizing effect on the world economy of the United Kingdom’s decision to leave the European Union, Gian Maria Milesi-Ferretti, deputy head of the IMF’s research department, said that growth projections for Central and Eastern Europe have undergone only slight adjustments. Poland’s growth is projected to be 3.7 percent next year. This compares to a projection for the global economy for this year to 3.1 percent, down from 3.2 percent forecast in the IMF’s April report.

According to the report, “the global outlook for 2016-17 has worsened, despite the better-than-expected performance in early 2016,” especially in the Euro zone and Japan. The post-Brexit “deterioration reflects the expected macroeconomic consequences of a sizable increase in uncertainty, including on the political front. This uncertainty is projected to take a toll on confidence and investment, including through its repercussions on financial conditions and market sentiment more generally.”

Be that as it may, it would not be Poland without some less good news. And this comes in the form of Poland’s population having decreased for the fifth year in a row. At the end of June, GUS’s figures showed at population of 38,422,000 a drop of 15,000 over the last six months and 27,000 over the year.

This appears to be largely as result of the number of deaths exceeding the number of births by 9,000 in the first half of this year. According to the GUS figures 191,000 children were born in first half of 2016, 10,000 more than last year. Europe as whole faces a population problem with many countries falling below the 2.1 children per woman ratio necessary to replace the population with some countries, such as Italy, having gone into what appears t be irreversible decline.

For Poland, even Brexit is unlikely to offer a solution with as many as 62.5 per cent of Poles saying in a recent poll after the referendum result that they would remain in the UK. Only 5.5 per cent said they planned to leave if the UK were to leave the EU with 40.5% of those polled responding that they would be staying in the country at all costs. Of course, until the final deal is done it remains unclear who would and would not be entitled to permanent residence although a mass displacement of folk across the EU seems inconceivable.

So despite the continuing constitutional tussles, Poland is still capable of supplying good news, which seems an optimistic note on which to end.

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