TOP MACRO THEME(S):
- A bitter pill of interest rate hikes: Monetary Policy Council raised the NBP interest rates by 75bps. The reference rate now stands at 6.0% and is the highest since October 2008.
WHAT ELSE CAUGHT OUR EYE:
- The registered unemployment rate in May declined to 5.1% from 5.2% in April, on MinLab flash estimate. The number of unemployed declined by 26 thousand in a month, slightly below the seasonal pattern for May, suggesting strong labour supply constraints. We believe that the unemployment rate figure could have (once again) underestimated the number of Ukrainian refugees working in Poland (more than 200 thousand since the beginning of the war) so the final May reading could be lower.
- The government proposed to raise the minimum wage to PLN 3,383 from Jan 2023, and PLN 3,450 from July 2023 (two phase-hike is required by the law in the environment of high inflation) from PLN 3,010 in 2022. The regulation will affect 2.74 million employees, on government estimates. The minimum wage is expected to grow by 14.6% and we estimate it to be equal to 52% of the average wage in 2h2023.
THE FORTNIGHT AHEAD:
- In the two weeks ahead we will see the whole set of macroeconomic figures for May and April (see economic calendar on page 3 for more details). We expect IP and construction data for May to be relatively good as calendar effects are masking lower inflow of orders. Labour market in May has likely remained red-hot with enterprise wages growing by almost 15% y/y. Retail sales has been supported by the spending of refugees despite unfavourable statistical effects. April has likely shown yet another monthly CA deficit.
- May CPI will most likely be confirmed at or above the flash reading of 13.9%. Core inflation probably went up to 8.5% y/y.
NUMBER OF THE WEEK:
- 4+4 – the number of months when clients will be entitled to a moratorium on mortgage payments in 2022 and 2023 respectively, as assumed in the bill that has just been passed by the lower house of parliament.