This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
Interactive chart The reading was well below the market consensus, which had expected wages to rise by 7.2%.
XYZ’s perspective: a rate cut is inevitable
The sharper-than-expected slowdown in wage growth is consistent with my intuition after the Monetary Policy Council’s (RPP) February meeting. At the time, I argued there was a strong chance the data would surprise on the downside. Wage pressure may prove weaker than anticipated, and inflation lower as well. That would point to a rate cut as early as March. Under such a scenario, interest rates could fall below 3.5%.
The release only reinforces that conviction – especially given that the enterprise sector covers just part of the economy, namely firms employing more than nine people. The remainder consists of the public sector and smaller businesses. In their case, wage dynamics are driven more by pay rises in the public sector (3%) and by the increase in the minimum wage (also 3%).
The smaller the company, the higher the share of employees earning the statutory minimum. This suggests that, across the economy as a whole, wage growth is likely weaker than in the enterprise sector alone. Taken together with January 2026’s low inflation reading of 2.2%, these arguments should, in my view, be sufficient to persuade members of the Monetary Policy Council (RPP) to move toward a looser monetary stance.
Winter outside, winter in the data
Construction and assembly output disappointed in January. It was down 12.8% year on year compared with January 2025. Stripping out seasonal effects offers only marginal relief: on a seasonally adjusted basis, the decline still stands at 10.8%.
This was largely the result of a harsh winter, compounded by the configuration of working days. Even so, the outcome was weaker than the market had expected, despite widespread awareness of the adverse weather conditions at the start of the year. The consensus forecast pointed to a fall of just 3.5%.
It is therefore likely that more than winter alone lay behind such a poor performance in construction output. Over a longer horizon, however, a gradual recovery in this indicator should be expected in the months ahead.
Meanwhile, industrial production cooled after a strong December 2025. That month, output had risen by 6.9% year on year. In January 2026, however, it fell by 1.5% y/y. On a seasonally adjusted basis, industrial production inched up by just 0.4%.
Interactive chart A similar pattern emerged at the end of last summer: following robust growth in August, industrial output returned to more modest gains of 0.5–1.5%. A sustained recovery in the sector will require several consecutive months of solid performance before it can be confirmed.