Why pay rises in Poland do not fully boost spending

This article is a part of Poland Unpacked. Weekly intelligence for decision-makers

In our analysis summarizing the outlook for 2026, we wrote that GDP growth could reach as much as 4%, with private consumption as one of its two key engines. Wages are the critical factor underpinning consumption. It is therefore worth examining how the relationship between wage growth and consumption has evolved over the past 20 years – and what that implies for 2026.

For many years, consumption has tended to grow more slowly than real wages. The main reason is rising household wealth, which has increased the propensity to save. Put simply, as more people are able to meet their needs, they can set aside an ever-larger share of their rising incomes.

In 2025, consumption growth will be around 0.9 percentage points lower than the increase in real wages - that is, nominal pay adjusted for inflation. By my estimates, real wages rose by 4.7% year on year, while consumption increased by roughly 3.8%. This marked the first year of normalization in the relationship between wages and consumer spending.

Between 2020 and 2024, the picture was far more volatile. In the first year of the pandemic, households sharply curtailed spending, generating additional savings. Part of this stockpile was then spent in 2021 and 2022, when consumption growth was also fueled by high inflation. In 2022, consumer spending was further boosted by refugees fleeing the war in Ukraine. From 2023 onward, households returned to saving mode, and consumption growth again lagged behind wage dynamics.

Looking back over the past two decades, the general pattern is clear: households tend to spend less than the pace of wage growth. The main exceptions have been periods such as the recent inflationary crisis or the introduction of the “500+” child-benefit program in 2017. By contrast, in 2008–2012 consumption was driven largely by credit. It is also worth remembering that consumption dynamics are influenced not only by wages, but also by pensions and disability benefits, as well as profits earned by business owners.

The outlook for 2026

What comes next? In 2026, real wage growth is expected to reach around 4–4.5% year on year. How much, then, might consumption rise? The key variable will be the propensity to save. According to household surveys conducted by Statistics Poland (GUS), the declared willingness to save is at its highest level in the history of these surveys – at least since 2010. The open question is whether this represents a lasting shift, or whether the propensity to save will begin to decline as households rebuild their balance sheets after the inflation shock.

So how strong could consumption growth be in 2026? In a scenario of slightly faster wage growth (4.5%) combined with a modest decline in the propensity to save, consumption could rise by around 3.5%. In the most unfavorable scenario – slower wage growth coupled with a higher saving rate – consumption growth would be closer to 3%, possibly even a bit below. To this, however, one should add the expected increase in credit demand, driven by lower interest rates.

Either way, consumption is likely to remain resilient.

Wages remain the main driver of growth. In 2026, Poland’s GDP growth - potentially up to 4% - will hinge largely on private consumption, underpinned by continued real wage increases of around 4–4.5%.
Consumption still trails wage growth. Historically, household spending has grown more slowly than real wages due to rising savings and stronger household balance sheets. This pattern is expected to persist, though the gap may narrow slightly if savings rates ease.
Outlook: moderate but resilient consumption. Depending on saving behavior, consumption growth should range between 3% and 3.5% in 2026. Even in a cautious scenario, lower interest rates and recovering consumer confidence are set to sustain solid domestic demand.