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2019/09/23 / Erste Group Research

Poland Special | Minimum wage channel to inflation

Announced minimum wage increase implies risks of the inflation rate going above 3% in 2020 and being above the 2.5% target in the following year. Central bank to hold-off, however.

We would expect the impact of minimum wage on inflation coming mostly through an increase in the prices of services. We assume that companies will pass the increase in labor costs to consumers through higher output prices, mainly in non-tradable sectors.

Although inflation is likely to rise, due to the minimum wage increase, we believe the central bank should keep the policy rate stable. There are many arguments working against monetary tightening.

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General information

AuthorErste Group Research
Product nameCEE Economies Special Report
Topic in focusMacro/ Fixed income
Economy in focusPoland
Currency in focusPolish Zloty
Sector in focus-


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