In the second quarter of 2012, nominal labor costs in Poland rose by 3.9 percent in comparison to the same period a year earlier, Eurostat revealed last Monday. The European statistical agency said that the increase was due largely to pay rises, and not new overhead costs or taxes.

However, with inflation at nearly 4 percent for that period, according to Poland’s statistical office, in real terms, the country’s labor costs have not risen.

In comparison, Eurostat found that in the same period real labor costs grew by 1.2 percent in the Czech Republic, 5.1 percent in Romania and 3 percent in Bulgaria. Meanwhile, in Hungary, real labor costs decreased by 0.8 percent and in Slovakia by 0.6 percent.

Poland’s Central Statistical Office released data last Tuesday that showed that corporate sector employment and wages dropped month-on-month in August (0.1 percent and 0.4 percent respectively) and that in year-on-year terms, corporate employment remained stable, while wages rose by 2.7 percent. In the eight months to August, employment rose by just 0.3 percent over last year, while wages grew by 3.9 percent.

“These data are in line with our scenario of labor market stagnation in the upcoming months,” wrote Maciej Reluga, chief economist at Bank Zachodni WBK in an e-mail.

“In our view, [the] labor market data, together with CPI figures and expected by us weak growth of output in industry … should deliver sufficient arguments for most [Monetary Policy Council] members to cut interest rates at October’s meeting.”

RA, AK